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It is likely interstate commerce, since the affiliates don't work for Amazon, but it would also likely land Amazon in court in a large court battle. That battle

It is likely interstate commerce, since the affiliates don't work for Amazon, but it would also likely land Amazon in court in a large court battle. That battle may eventually get to the US Supreme Court, but I don't think Amazon wants the distraction. I do wonder at what point loss of sales from affiliates will cost more than collecting taxes. Apparently, Amazon thinks it's a long way out given how readily they cut ties.

gojomo 15y ago
Amazon would like to win this in the legislature, as they have in some states with lobbying and the pull-out threat. Or by gubernatorial vetoes, as previously in California and just a few weeks ago in Texas. Or in the courts, as they are currently challenging a similar New York law. (Amazon lost an early round; they're appealing.) They'd rather win before going to the Supreme Court but I think they'd try that route if they had to. The distraction would be worth it; this is a very, very valuable price advantage against in-state retailers like NewEgg. The Supreme Court might find this new crop of laws, and the affiliates-as-sufficient-nexus logic, sufficient. These were crafted with the previous Supreme Court decision in mind, the one from before Internet commerce (1992) that prevented sales tax on out-of-state sellers. Or Amazon might win an updated precedent which would leave only Congress with the ability to address cross-state sales.
dangrossman 15y ago
I have doubts that there is any point where loss of sales from affiliates would cost more than taxes. The main reason for Amazon to have an affiliate program is not awareness but SEO. The tens of thousands of people placing links directly to Amazon product pages are what keep Amazon at the top of search results for hundreds of thousands of product names, in turn driving much of their search traffic.

gojomo 15y ago

Amazon would like to win this in the legislature, as they have in some states with lobbying and the pull-out threat. Or by gubernatorial vetoes, as previously in California and just a few weeks ago in Texas. Or in the courts, as they are currently challenging a similar New York law. (Amazon lost an early round; they're appealing.) They'd rather win before going to the Supreme Court but I think they'd try that route if they had to. The distraction would be worth it; this is a very, very valuable price advantage against in-state retailers like NewEgg. The Supreme Court might find this new crop of laws, and the affiliates-as-sufficient-nexus logic, sufficient. These were crafted with the previous Supreme Court decision in mind, the one from before Internet commerce (1992) that prevented sales tax on out-of-state sellers. Or Amazon might win an updated precedent which would leave only Congress with the ability to address cross-state sales.

dangrossman 15y ago

I have doubts that there is any point where loss of sales from affiliates would cost more than taxes. The main reason for Amazon to have an affiliate program is not awareness but SEO. The tens of thousands of people placing links directly to Amazon product pages are what keep Amazon at the top of search results for hundreds of thousands of product names, in turn driving much of their search traffic.