Amazon.com’s fight with U.S. states over Internet taxes has now spread to the biggest of them, California.

In a message affiliates today, the Seattle-based online retailer says it will terminate its Amazon Associates Program in California if Gov. Jerry Brown signs into law a bill that would require online retailers to collect taxes on sales in the state if they have relationships with affiliates there — small sites that earn referral fees for linking to Amazon.com products.

It’s the latest in a series of similar battles around the country, as states grapple with budget shortfalls.Most recently, Amazon cut ties with affiliates in Connecticut and Arkansas.  California’s population makes the stakes there even higher.

UPDATE: Amazon cans affiliate program in California after Governor Brown inks tax law

Here’s the email  that Amazon sent to its affiliates today …

For well over a decade, the Amazon Associates Program has worked with thousands of California residents. Unfortunately, a potential new law that may be signed by Governor Brown compels us to terminate this program for California-based participants. It specifically imposes the collection of taxes from consumers on sales by online retailers – including but not limited to those referred by California-based marketing affiliates like you – even if those retailers have no physical presence in the state.

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. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.

As a result, we will terminate contracts with all California residents that are participants in the Amazon Associates Program as of the date (if any) that the California law becomes effective. We will send a follow-up notice to you confirming the termination date if the California law is enacted. In the event that the California law does not become effective before September 30, 2011, we withdraw this notice. As of the termination date, California residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com. Please be assured that all qualifying advertising fees earned on or before the termination date will be processed and paid in full in accordance with the regular payment schedule.

You are receiving this email because our records indicate that you are a resident of California. If you are not currently a resident of California, or if you are relocating to another state in the near future, you can manage the details of your Associates account here. And if you relocate to another state in the near future please contact us for reinstatement into the Amazon Associates Program.

To avoid confusion, we would like to clarify that this development will only impact our ability to offer the Associates Program to California residents and will not affect their ability to purchase from Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com.

We have enjoyed working with you and other California-based participants in the Amazon Associates Program and, if this situation is rectified, would very much welcome the opportunity to re-open our Associates Program to California residents. We are also working on alternative ways to help California residents monetize their websites and we will be sure to contact you when these become available.

Regards,

The Amazon Associates Team

Previously on GeekWire: Map: Amazon’s sales tax battle

 

Comments

  • http://twitter.com/trikome frantik

    most of the comments on twitter seem to be people upset with California, which is exactly what Amazon wants.  They way they word the letter, it makes it seem like Amazon HAS to cut off the associates program.  But it’s more like Amazon is being a big baby about it and threatening to take their ball and go home if they don’t get their way

    • Chad

      Yep, it’s worded perfectly if you’re a company trying to protect your business interests (as all companies do).  The reality is that Amazon has a huge advantage over brick-and-mortar stores in most states by not having to collect sales tax.  If you live in a state like CA with a very high sales tax, the savings can be pretty significant on an annual basis as a consumer.  Now, I know people are supposed to calculate the tax and pay it, but no one does – hence these bills in various states.

      The federal government should solve this country-wide.

      • Guest

        I pay my use tax, Chad. It’s easy. Just go on your favourite search engine and google “use tax” followed by the name of your state. It takes about 2 minutes. You can even pay the state of Washington by credit card. The cure for unenforced legislation is not more legislation.

        • Aphr

          wow whata dumbass

    • Troy

      When are all of you liberal dumb asses going to figure it out. When government makes laws that are unfriendly to business, business will do what is in it’s best interest. If that means move to another state or another country, so be it. You people need to either learn how to make laws friendly to business or learn how to wave goodbye. Business does not object to reasonable laws or reasonable taxes. But when it becomes unreasonable, they will leave. By the way, reasonable as per their definition….. Not yours in your little idealistic world. You people are always generous with other peoples money.

  • http://jasonputorti.com Jason

    There’s an open letter on Votizen now calling Governor Brown to veto this tax, tweet a link if you agree: https://www.votizen.com/letters/27/

    Or go and sign it directly if you’re a California resident.

    • Anonymous

      Too late, he signed it. Stupid, too. Not only does the state get no sales tax, it loses the income tax from the Affiliates.

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