Company cancels affiliate accounts due to sales tax law.
Amazon.com (NASDAQ: AMZN) has officially dumped its North Caroline affiliates (aka “Associates”), as it threatened to do a couple weeks ago.
North Carolina’s legislature has created a lose-lose-lose situation by preparing to pass a law requiring online companies to collect sales tax if they have affiliate marketers in the state. Since major ecommerce companies such as Amazon will drop affiliates in the state, the law won’t have the desire effect. Instead, North Carolina’s income tax will go down as it puts its constituents out of business. Amazon gets less sales, affiliates lose income, and North Carolina doesn’t get the tax revenue it hoped for.
A Domain Name Wire reader sent this e-mail from Amazon:
We are writing from the Amazon Associates Program to notify you that your Associates account has been closed as of June 26, 2009. This is a direct result of the unconstitutional tax collection scheme expected to be passed any day now by the North Carolina state legislature (the General Assembly) and signed by the governor. As a result, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com after June 26. We were forced to take this unfortunate action in anticipation of actual enactment because of uncertainties surrounding the legislation’s effective date.
Please be assured that all qualifying referral fees earned prior to June 26, 2009 will be processed and paid in full in accordance with our regular referral fee schedule. Based on your account closure date of June 26, 2009, any final payments will be paid by September 1, 2009.
In the event that North Carolina repeals this tax collection scheme, we would certainly be happy to re-open our Associates program to North Carolina residents.