Tax happy states cut off business for Amazon associates


As states try to find revenue anywhere they can, Amazon (AMZN) associates may find themselves out of business. Amazon has already cut off associates in two states -- Rhode Island and North Carolina. Both states wanted the retailer to collect state's sales taxes generated by Amazon associates located in their state. Amazon doesn't want to do that and instead sent emails to the associates ending its business relationship.

Now the states won't get the additional revenue and they've cut off income of some of their citizens -- a lose-lose situation for everyone. States are taking the position that associate websites are among the physical assets of Amazon, so therefore they can tax revenue generated by those websites. Rhode Island passed the legislation, which still sits on the governor's desk for signature, but since the bill passed with a veto-proof majority, Amazon assumes it will become law.