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A few years ago, states started passing laws requiring Amazon to pay sales tax if it offered affiliate marketing programs in their state, rather than only being required to pay them if it had physical facilities there. This resulted in Amazon cutting off its affiliate programs in any state that passed such a law (such as my former home, Missouri).

Amazon finally fought New York’s law to the Supreme Court—and the Supreme Court declined to hear the appeal, meaning that the appeals court decision affirming the law will stand. Amazon has been pushing for the “Marketplace Fairness Act,” which would streamline the process of tax collection, but that law is currently stalled in the House.

With the New York law effectively ruled constitutional, even more states might start passing affiliate tax laws. It is not clear what it will gain them, however—Amazon’s traditional response has been to discontinue its affiliate program to customers who live in those states, meaning that the sole effect is to make former Amazon affiliates angry with their government for cutting off their revenue.

 
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