Sales tax
legislation strikes again! Amazon.com is terminating its contracts with
affiliates in Minnesota effective June 30, 2013, thanks to a bill passed in
May. The state is home to retail chains Best Buy and Target. In its letter to
Amazon Associates, the marketplace called its decision "a direct result of
the unconstitutional Minnesota state tax collection legislation passed by the
state legislature and signed by Governor Dayton on May 23, 2013, with an
effective date of July 1, 2013."
The Minnesota
bill was made possible thanks to New York legislators. While other states were
trying to figure out how to get ecommerce sites like Amazon to collect sales
tax owed by their residents, New York state came up with a way by arguing
Amazon had nexus in the state because it compensated its New York affiliate
advertisers, who are neither employees nor contractors of the company. That was in 2008, and since then, 11 states have passed such laws, according to the Performance Marketing Association (PMA), which has been fighting against such legislation in Minnesota for the past 4 years. And while Amazon is collecting sales tax in a few of the states where these laws passed, in most such states it has fired its affiliates.
