New State Tax Laws Upset Amazon, Overstock
July 20, 2009,
With legislatures in the states of California, North Carolina, Hawaii and Rhode Island readying laws that would require internet retailers to collect taxes from local affiliate advertisers, two of the web's biggest retail aggregators announced this week they will break off business with affiliates in those states — although so far, Amazon has not announced breaking off with California.
The constitutionality Byren referred to involves a U.S. Supreme Court decision requiring a company to have a "physical presence" in a state before it can enforce sales tax collection.
In May 2008, Overstock broke off business ties with more than 3,400 New York advertising affiliates when the state enacted the first of such tax laws. Overstock.com and Amazon each filed suit against New York, both of which are pending.