Thanks in large part to massive budget shortfalls, a number of state governments in the U.S. have pushed for so-called ‘affiliate taxes‘. The idea is simple: by changing the laws so that online retailers with in-state affiliates are on the hook for collecting state sales tax, lawmakers believe they can increase revenue for their states’ coffers.
For the most part, large online retailers have refused to play ball. Amazon, for instance, has cut off affiliates in states that have adopted, or contemplated adopting, affiliate taxes. Others have followed Amazon’s lead.