The Wall Street Journal is reporting that Amazon.com will cut ties with the 10,000 participants in Amazon’s associate program if legislation to require the company to collect sales taxes is enacted.

In a letter to California’s Board of Equalization, which oversees the collection of property taxes, sales taxes and other fees, Seattle-based Amazon said four bills introduced to the state legislature are unconstitutional because they would ultimately require sellers with no physical presence in California to collect sales tax merely on the basis of contracts with California advertisers.

“If any of these new tax collection schemes were adopted, Amazon would be compelled to end its advertising relationships with well over 10,000 California-based participants in the Amazon ‘Associates Program’,” wrote Paul Misener, Amazon’s vice president for Global Public Policy, in a letter dated Feb. 24.

The U.S. Supreme Court in 1992 ruled that companies are not required to collect state sales taxes if they do not have a physical presence in that state.

California is dead and broke and is now trying to take it out on the thousands of Amazon affiliate in the state, me included.

Originally posted by Dane Carlson on March 2, 2011 in Ideas.

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