Amazon Drops Missouri Affiliates
- By David Grogan
Amazon has fired all its online affiliates in Missouri to avoid the requirement to collect and remit sales tax to the state. Missouri recently passed an affiliate nexus law requiring all remote retailers with online affiliates acting as sales agents in the state to collect and remit sales tax for purchases made by Missouri residents.
“Amazon’s treatment of its online affiliates again offers clear evidence of its determination to flout state sales laws and undercuts its self-described role as a job creator,” said ABA CEO Oren Teicher. “Studies by the Institute for Local Self-Reliance and others have shown that Amazon’s business practices cost the U.S. economy more than 42,000 jobs nationally in 2012, and this latest move in Missouri will only further hurt small business owners. Ironically, while Amazon claims to lawmakers in Washington, D.C., that it supports leveling the playing field for Main Street businesses, its opposition at the state level does nothing to advance sales tax equity.”
In July, Missouri clarified its sales tax law to require remote retailers with a network of online affiliates acting as sales agents in the state to collect and remit sales tax to the state. The law contains a small-seller exemption that stipulates a remote retailer must be doing $10,000 or more per year in online affiliate sales in the state to have nexus. Missouri is one of 16 states to pass affiliate nexus laws, and, in all those states save New York (where Amazon challenged the constitutionality of the law and lost), Amazon fired its online sales agents.
In its letter to its Missouri affiliates, Amazon noted its agreement would be terminated effective August 27, 2013, as a “result of the unconstitutional Missouri state tax collection legislation passed by” Missouri lawmakers, as reported by Legit Reviews.
While Amazon may claim the law is unconstitutional, its legal challenge to New York’s affiliate nexus law, which is the same as Missouri’s, failed in court. Amazon challenged the constitutionality of the law in New York and lost its initial challenge and its two attempts to appeal, most recently at New York’s highest court, the Court of Appeals.
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