This morning North Carolina and Hawaii affiliates awoke to some really bad news. Ahead of pending advertising tax legislation, Amazon took a preemptive strike by dropping affiliates effective immediately. They took this action early because the date the laws go into affect is unclear and the affiliate program must be closed to state affiliates PRIOR to the law passing or a presumption of nexus will be established.

If you aren’t familiar with the advertising tax (Amazon tax) issue that is threatening our industry, you can catch up on all the coverage here.

California and several other states have similar legislation pending.
I hope the message gets to the State of California loud and clear that passing this bill will NOT raise the income they are hoping for, because Amazon has already said they will close the affiliate program in CA as well. So the extra sales tax income will NOT be generated and in addition thousands of small business people (affiliates) will be hurt and suffer income cuts, thereby REDUCING income taxes to the state.

Melanie Seery has more info. Amazon Terminates Hawaii and North Carolina

Melanie also has a really good piece that MERCHANTS and AFFILIATE MANAGERS in affected states need to be sure to read prior to making a decision about whether or not to terminate affiliates due to these unconstitutional laws. She covers the fact that having to start charging sales tax really does not have much of a negative impact on overall sales. Internet Tax Has Only Slight Effect

If you are in one of the states with pending tax bills and have not contacted your state legislators to show your opposition yet, there is a template you can use and customize in this post over at the Performance Marketing Alliance.