Amazon Drops Affiliate Programs in 2 States Citing Taxes
SEATTLE — Amazon has closed its affiliate programs in Arkansas and Connecticut citing tax collection as the reason for the shut down.
The company said contracts with all Connecticut residents who participate in the Amazon Associates Program would be terminated immediately and contracts in Arkansas will terminate July 24, according to a report on CNET.com.
Local governments have tried to force Amazon to pay taxes in states where affiliates are located, although Amazon isn’t required to collect taxes where it has no physical presence.
The online retailer has already closed affiliate programs in other states such as Illinois, Colorado, North Carolina and Rhode Island and is looking at doing the same in other states.
In letters sent to affiliates, Amazon blamed the budgets signed by the governors in Arkansas and Connecticut that force it to collect tax from online purchases. Because of these new state laws, the company said it was compelled to shut down the affiliate programs.
"We opposed this new tax law because it is unconstitutional and counterproductive," Amazon said in the letter to Connecticut affiliates.
"It was supported by big-box retailers, most of which are based outside Connecticut, 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."
Amazon’s CEO Jeff Bezos said that the way to fix this issue is through federal regulation.