Similar to a move made in Illinois a few months ago, Amazon shut down its Associates program in Connecticut after the state introduced a sales tax measure that taxed any online purchases from July 1. We’ve included the note for Amazon Associates participants below.
As you know, the program allows website owners to earn money from advertising and linking to an Amazon product on their sites. Connecticut has not been able to collect local sales tax on online purchases because online retailers do not have a physical presence in the state. But states like Illinois and Connecticut keep big e-commerce sites like Amazon and Overstock.com, which run affiliate programs, having a presence because of these local affiliates.
And now the e-commerce giants are retaliating by pulling their affiliate programs out of these states. Amazon has shown in the past that it is not afraid to close Associates programs in countries that impose an online sales tax. The e-commerce giant has made similar strides in Hawaii, Colorado, North Carolina, and most recently, Illinois. In fact, Overstock exited Connecticut in late May for the same reason.
As Amazon wrote in its memo to Connecticut affiliates: We have opposed this new tax law because it is unconstitutional and counterproductive. It was backed by large retailers, most of whom were located outside Connecticut, who sought to harm the advertising programs of their competitors. Similar legislation in other states resulted in job and income losses, and little, if any, new tax revenue. We deeply regret the need to take this action.
Amazon says the referral program will close today and all fees earned by affiliates before this date will be paid to participants.
For more than a decade, the Amazon Associates program has worked with thousands of Connecticut residents. Unfortunately, Governor Malloy’s budget contains a sales tax clause that forces us to terminate this program for Connecticut residents, effective immediately. It specifically imposes taxation on consumers on sales by online retailers – including but not limited to those referenced by Connecticut-based affiliates like you – even if those retailers do not have a physical presence in the state.
We have opposed this new tax law because it is unconstitutional and counterproductive. It was backed by large retailers, most of whom were located outside Connecticut, who sought to harm the advertising programs of their competitors. Similar legislation in other states has resulted in job and income losses, and little, if any, new tax revenue. We deeply regret the need to 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. These Connecticut residents will not receive advertising fees for sales referenced on Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com. Please ensure that all eligible advertising fees earned on or before today, June 10, 2011, will be processed and paid in full according to the normal payment schedule.
You are receiving this email because our records indicate that you are a resident of Connecticut. If you are not currently resident in Connecticut, or if you are moving to another state in the near future, you can manage your Associates account details here. If you move to another state after June 10, 2011, please contact us to return to the Amazon Associates Program.
To avoid confusion, we would like to make it clear that this development will only affect our ability to offer the Associates Program to Connecticut residents and will not affect their ability to purchase from www.amazon.com.
We have enjoyed working with you and other Connecticut participants in the Amazon Associates program, and if this situation is corrected, we would very much welcome the opportunity to reopen our Associates program to Connecticut residents.
It is considered,
Amazon Associates team