HARTFORD, Conn. (AP) – Amazon.com says it is severing its relationships with affiliates in Connecticut because of a new state tax on certain online purchases.

The retail giant gave notice Friday in a letter to small retailers in the state that until now have received fees for funneling sales to Amazon. The affiliates sell products through Amazon or offer links to Amazon on their own websites.

The letter described the law as counterproductive and said it was supported by big-box retailers that are out to hurt competitors’ affiliate advertising programs.

Under the new budget, sales tax will be collected when somebody purchases an item online through a website based in Connecticut.

Last month, Salt Lake City-based Overstock.com Inc. said it canceled ad contracts with Connecticut affiliates rather than collect the tax.

     (Copyright 2011 by The Associated Press.  All Rights Reserved.)

Comments (5)
  1. Bruce Trav says:

    This is a perfect example of our elected officials not understanding the implications of their actions. Now, not only will the State not receive the tax from this service, they will also not receive the income taxes associated with the sales since the small businesses in the state are no longer able to sell via Amazon.

    CT is “open for business”? Anything but…

  2. J Zeleznicky says:

    That turkey running the show thinks he is still in his rich town near the New York border…….Most of the people in the state are just about making it….all he wants to do is look good in front of his political friends….BULL>

  3. Spanky says:

    There is a legitimate reason for states to tax sales of products sold in stores in those states because the state provides services that directly support those stores.

    However, there is no legitimate reason for states to tax mail order and internet sales from out of state. The state provides no services in exchange.

  4. Jadams76 says:

    I’m a graduate of a presitigious economics school and while I’ve never had what you would call an actual ‘paying job’, I do work in the academic world and have advised the State and Federal government many times. I do have some ideas. We do not have to cut vital services like this and can easily make up any shortfalls in revenue enhancement and create more jobs…good paying jobs…by my Enhance Revenue Return- from the Rich Only Boat owners Scheme {ERR-ROBS} here in Ct. This well thought out plan is a model for having the rich ‘pay their fair share’ and spreading the wealth around to the neediest among us. Especially the children,seniors and disabled children and seniors. . How ERR-ROBS works is that a ‘luxury tax’ on big boats will induce boat owners to purchase more boats, builders to build more boats and then in response hire more workers, who will then leave the unemployment rolls and not require the State to invest so much resources in uneployment benefits. All the while enhancing the State’s coffers with new revenue All the economists I’ve talked to say this plan will raise billions, balance the budget in the out years and that ,as Senator Kerry [D-MA] proved, rich boat owners are eager to pay their fair share of revenue enhancement because it’s patriotic.
    A little off topic, but as regards health care, if you like your doctor, you can keep your doctor. Nothing will change..except it won’t cost a dime..not one dime.. and premiums will actually go down as you ‘bend over’ the cost curve downward.

  5. Peter Neil says:

    Jadams76, with all due respect, wealth re-distribution will not work. As an economist you should recognize the “unintended consequences” that may occur from such an initiative. John Kerry has no intention of paying that tax until he was caught. If you would like to create more jobs, perhaps hire individuals to police all of the entitlement programs and make improvements where necessary, and hold all individuals ACCOUNTABLE for their actions over the long haul… but of course, that wouldn’t be fair to all those expecting handouts…

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