Amazon ditches marketing affiliates

Amazon says it has dropped the California members of its marketing affiliates programme in response to the state's new law to charge sales taxes on online goods, reports Venture Beat.

Amazon competitor Overstock also intends to drop its California affiliates.

Amazon is by far the largest online retailer with more than $34 billion in annual sales. Until now, Amazon and other digital retailers have had a significant advantage over local stores because it doesn't have to charge sales tax in any state where it doesn't have a substantial corporate presence.

According to the E-Commerce Times, in response to the signing of the California law, Amazon sent a letter to its affiliates in California terminating their relationships.

In the letter, Amazon called the legislation “unconstitutional and counterproductive.” It claimed the bill was supported by “big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors.”

ZDNet writes, essentially, certain states have grubbed for tax money by passing laws that expand the definition of physical presence.

They are specifically targeting e-commerce sites that work with affiliates - ore specifically, websites that partner with Amazon as affiliates to earn commissions from individual sales.