March 10, 2010

Amazon is dropping Colorado affiliates notified thousands of Colorado affiliates over the course of the last weekend that it is severing its relationship with them in response to the advertising tax that went into effect March 1 in that state.

The Performance Marketing Association led our industry’s fight against HB 1193, and all involved considered it a victory when language that specifically targeted affiliates was removed from the bill. However, the lawrequires all online retailers who do not collect sales tax to put a notice in the Colorado customer’s invoice notifying them they are by law obligated to pay sales tax in the state for their purchase. It also requires retailers to submit a yearly list of customers and purchasing data to support Colorado’s enforcement ability.

Amazon’s action is part of a growing merchant reaction to the new law. Oriental Trading Company, Hammacher Schlemmer, Terry’s Village and have all terminated relationships with Colorado affiliates.

Amazon’s decision came with the following announcement;

“We and many others strongly opposed this legislation, known as HB 10-1193, but it was enacted anyway. Regrettably, as a result of the new law, we have decided to stop advertising through Associates based in Colorado. We plan to continue to sell to Colorado residents, however, and will advertise through other channels, including through Associates based in other states.”

To stay informed about the advertising tax being fought in several states, visit the Performance Marketing Association.

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