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Amazon cuts R.I. affiliate ties over taxes

Bloomberg News / June 30, 2009
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SAN FRANCISCO - Amazon.com Inc., the world’s biggest Internet retailer, cut ties with its Rhode Island business affiliates after the state’s assembly passed legislation requiring the company to collect taxes.

Amazon.com sent a notice to the affiliates Sunday night, said Patty Smith, a spokeswoman for the Seattle-based company. Amazon.com did the same thing to North Carolina affiliates last week over similar legislation in that state.

The company is also fighting tax proposals in California, Connecticut, and Hawaii, arguing that Amazon.com shouldn’t have to pay taxes in states where it doesn’t have a physical presence. The company has not cut off business with them yet, she said.

The affiliate program, called Amazon Associates, lets website owners make money by posting ads for Amazon.com’s products. The company pays them a referral fee of as much as 15 percent if someone clicks through and buys something.

“In the event that Rhode Island repeals this tax collection scheme, we would certainly be happy to reopen our Associates program to Rhode Island residents,’’ Amazon.com said in its notice to the affiliates.

Amazon.com said it’s not against a sales tax that’s the same across every state.

The company is opposed to individual states crafting a patchwork of different standards, Smith said.