Amazon.com has killed another affiliates program due to proposed legislation that would force the company to collect and pay sales tax in Rhode Island.
The move comes less than a week after Amazon notified its affiliates in North Carolina it would be ending its program there due to similar proposed legislation.
The affiliates are members of a program called Amazon Associates, which allows them to place ads for Amazon items on their websites. Users can click through to Amazon’s site, and each affiliate receives money if a purchase is made.
Sucharita Mulpuru
Rhode Island affiliate Rick Wilson posted Amazon’s termination email on his blog.
“We are writing from the Amazon Associates Program to notify you that your Associates account has been closed as of June 29, 2009. This is a direct result of the unconstitutional tax collection scheme passed by the Rhode Island General Assembly with a veto-proof majority.”
“As a result, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com after June 29. We were forced to take this unfortunate action in anticipation of actual enactment because of uncertainties surrounding the legislation’s effective date. The governor could sign the bill – or have his veto overridden – any day now.”
The email goes on to say, “In the even that Rhode Island repeals this tax collection scheme, we would certainly be happy to re-open our Associates program to Rhode Island residents.”
Forrester Research analyst Sucharita Mulpuru estimated that 10 percent of Amazon’s sales could come from its associates, but the move to pull out of Rhode Island was unlikely to significantly impact the company’s bottom line.
“It couldn’t have been such a materially significant part of their revenue in the first place, that’s what it comes down to,” she told Reuters. “Affiliates are nice to have but by no stretch of the imagination are they going to make or break Amazon’s Web site.”
Other states considering similar tax laws include California, Connecticut and Hawaii.
