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Amazon Shuts Down Associates Affiliate Program In Connecticut Over Online Sales Tax

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Similar to a move made in Illinois a few months ago, Amazon has shut down its Associates program in Connecticut after the state imposed a sales tax measure that would tax any purchases made online starting July 1. We’ve embedded the note sent to participants in the Amazon Associates Program below.

As you may know, the program allows website owners to earn money from advertising and linking to Amazon product on their sites. Connecticut has not been able to collect local sales tax on online purchases because these online retailers don’t have an actual brick and mortar presence in the state. But states like Illinois and Connecticut are maintaining that large e-commerce sites like Amazon and Overstock.com, who both run affiliate programs, have a presence because of these local affiliates.

And now these e-commerce giants are retaliating by pulling their affiliate programs out these states. Amazon has shown in the past that its not afraid to shut down Associates programs in States that impose an online sales tax. The e-commerce giant has made similar moves in Hawaii, Colorado, North Caroline and most recently, Illinois. In fact, Overstock exited Connecticut in late May for the same reason.

As Amazon writes in its note to Connecticut affiliates: We opposed this new tax law because it is unconstitutional and counterproductive. 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. We deeply regret that we must take this action.

Amazon says the Affiliate program will be shut down today and all fees earned by affiliates before this date will be paid out to participants.

Hello,
For well over a decade, the Amazon Associates Program has worked with thousands of Connecticut residents. Unfortunately, the budget signed by Governor Malloy contains a sales tax provision that compels us to terminate this program for Connecticut-based participants effective immediately. It specifically imposes the collection of taxes from consumers on sales by online retailers – including but not limited to those referred by Connecticut-based affiliates like you – even if those retailers have no physical presence in the state.

We opposed this new tax law because it is unconstitutional and counterproductive. 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. We deeply regret that we must take this action.

As a result of the new law, contracts with all Connecticut residents participating in the Amazon Associates Program will be terminated today, June 10, 2011. Those Connecticut residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com. Please be assured that all qualifying advertising fees earned on or before today, June 10, 2011, will be processed and paid in full in accordance with the regular payment schedule.

You are receiving this email because our records indicate that you are a resident of Connecticut. If you are not currently a resident of Connecticut, or if you are relocating to another state in the near future, you can manage the details of your Associates account here. And if you relocate to another state after June 10, 2011, please contact us for reinstatement into the Amazon Associates Program.

To avoid confusion, we would like to clarify that this development will only impact our ability to offer the Associates Program to Connecticut residents and will not affect their ability to purchase from http://www.amazon.com.

We have enjoyed working with you and other Connecticut-based participants in the Amazon Associates Program and, if this situation is rectified, would very much welcome the opportunity to re-open our Associates Program to Connecticut residents.

Regards,

The Amazon Associates Team