Home / Markets

Tuesday, June 30, 2009

Amazon.com Pulls Out of Rhode Island, Hawaii

Hope Holland

FOXBusiness

Amazon.com ended its relationship with online associates in Rhode Island and Hawaii to avoid paying potential new sales taxes in the states.

The new state laws could require companies to collect a sales tax on products sold through online marketing partners.

Amazon.com spokeswoman Patty Smith called the proposed taxes unconstitutional saying the Internet retailer does not want to levy a sales tax on online purchases made on its sites from customers in areas where the company is not located.

“This is a direct result of the unconstitutional tax collection scheme passed by the Rhode Island General Assembly with a veto-proof majority,” the Amazon Associates Team said in an e-mail to Rhode Island affiliates.

Cash-strapped states are looking toward similar laws to increase revenue. Rhode Island faces a $590 million deficit for the fiscal year starting in July and Rhode Island Gov. Donald Carcieri is expected to decide on the bill by Wednesday.

“This is a direct result of the unconstitutional tax collection scheme passed by the Hawaii State Legislature with an effective date of July 1,” the company wrote in an e-mail Tuesday to associates in Hawaii.

On Friday the Seattle-based company also ended affiliate programs in North Carolina as the state considered passing a similar law, while threatening to do the same in California.