Amazon has ended ties with affiliates in Hawaii as the company continues to protest legislation that would force it to collect sales tax in that state.
New York, North Carolina, Rhode Island and Hawaii have all passed legislation that would allow them to collect sales tax on e-commerce sites not actually physically located in the state. New York passed this legislation last year, and Amazon has begun collecting sales tax there as it challenges the law in court. Amazon has taken a different strategy against everyone else by simply just terminating it affiliate program as it did in North Carolina, Rhode Island and Hawaii. California has proposed similar legislation and Amazon has threatened that it would end its affiliate program there.
According to Forrester Research, state governments could generate $3 billion in new revenues if Web retailers had to collect taxes on all sales to consumers.
Besides New York and its home state of Washington, the company collects sales taxes from customers in states where it has a physical presence, which are North Dakota, Kentucky and Kansas.
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