Amazon Dodging Taxes by Dropping Affiliates

Mark Ellis — Tue, 30 Jun 2009 01:04:18 +0000

Rhode Island just passed a law that forces companies to collect sales tax if they are affiliated to businesses that take a commission from links to another e-commerce website. The passing of this law has forced Amazon to drop its relationship with its marketing affiliates based in Rhode Island so that it would not have to collect sales tax in the state.

This is just off the heels of North Carolina’s passing of a similar law. Amazon responded similarly, dropping its North Carolina affiliates so that it would not have to collect sales taxes. Amazon may have to drop quite a few more affiliates as more and more struggling states consider passing this law to increase their income.

According to one of the affiliates affected by the law, small businesses are unfairly targeted by legislation that incorrectly classifies them as actual sales agents. Amazon also expressed its disdain for the law, calling it an “unconstitutional tax collection scheme” in a message to its Rhode Island affiliates.

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Amazon Dodging Taxes by Dropping Affiliates