Online retailer Amazon is leaving thousands of California-based online retailers in the lurch after the state passed a law requiring Amazon to collect sales taxes on sales made by its in-state affiliate networks
Amazon yesterday severed ties with its (roughly) 10,000 affiliates in the state, saying: “We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors,” The Amazon statement was first reported by Reuters.
The tax change, part of the new budget signed into law by Gov. Jerry Brown yesterday, is expected to raise $317 million in revenue a year, and is coupled with a one per cent reduction to the state sales tax.
Amazon has already stopped working with affiliates in Illinois and Connecticut, and has threatened to do the same in Texas, because of similar legislation.
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