This Friday California joins several other states, including New York, which require online retailers to collect sales tax on goods sold to state residents. This law has been popularly coined, nationwide, as the “Amazon Tax.”
Amazon’s response to this tax, as it has been in Colarodo, Connecticut, New York thus far:
Both Amazon in Seattle and Overstock in Salt Lake City have told affiliates that they would have to move to another state if they wanted to continue earning commissions for referring customers.
Under constitutional precedent, an online retailer is not required to collect sales tax on behalf of a state unless it has some type of physical presence in that state. Warehouses and marketing affiliates are considered a physical presence.
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