Amazon Tax

The Amazon Tax refers to a state statute that would consider the use of an affiliate network in determining an online retailer’s presence in the state for sales tax purposes. Ordinarily, an online retailer that has no physical presence within the state that sells to a state's resident is not required to collect sales tax, which generally leads to more competitive pricing. Under these state laws, online retailers that use affiliate networks within the state, like Amazon.com, would be considered to have a presence in the state and be required to collect sales tax from state residents that purchase products online.

In response to similar bills in other states such as Colorado and New York, Amazon.com and other retailers have ceased affiliate network activities in those states, rather than be required to collect sales tax.