Online retailer Amazon has severed its ties with affiliate businesses in Colorado following the introduction of a new state tax.
Affiliates help online retailers by passing on customers through adverts and links on their own website. In return they are paid a percentage of any resulting sales. Amazon announced yesterday it would no longer offer these businesses a fee for finding leads.
The decision relates to a new state law in Colorado which was passed in February. According to a report by the Associated Press, the law means online retailers now have to start collecting sales taxes from customers, or remind customers on an annual basis they need to pay a sales tax on their purchases.
Although the new law was amended to remove links between affiliates and the sales tax, Amazon has decided to cut ties with these businesses regardless.
A statement released by the governor of Colorado, Bill Ritter, said the decision taken by Amazon was “disappointing” and “completely unjustified”.
He said: “While Amazon is blaming a new state law for its action, the fact is that Amazon is simply trying to avoid compliance with Colorado law and is unfairly punishing Colorado businesses in the process.”