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Amazon uses Colorado affiliates as political pawns
Affiliates in the United States increasingly find themselves at the center of a battle pitting bankrupt state governments against major online retailers. The battle revolves around the thorny issue of state sales tax, and when online retailers are required to collect them.
Recently, affiliate marketers in Colorado were able to get language involving affiliates removed from a tax bill. Had the language not been removed, online retailers with Colorado affiliates would have been on the hook for collecting Colorado sales tax.
At the time, the removal of language that would have certainly put a crimp on affiliate marketers in Colorado seemed like a victory for the Colorado affiliates who fought tooth and nail to save their businesses. But 'seemed' is the operative word. The world's largest online retailer, Amazon, has decided to terminate its relationship with Colorado affiliates anyway. A letter Amazon sent to them yesterday explains:
We are writing from the Amazon Associates Program to inform you thatthe Colorado government recently enacted a law to impose sales taxregulations on online retailers. The regulations are burdensome and noother state has similar rules. The new regulations do not requireonline retailers to collect sales tax. Instead, they are clearlyintended to increase the compliance burden to a point where onlineretailers will be induced to "voluntarily" collect Colorado sales tax-- a course we won't take.
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