The online retailer reacts to the so-called Amazon tax by terminating its affiliates in Louisiana, as it has done in other states. Inc. has shuttered its affiliate program in Louisiana after the Legislature passed a law to force online retailers to collect sales tax when a sale results from a referral from an affiliate website based in Louisiana. It’s the latest in a long-running legal battle over the issue.

Affiliates receive a commission comprising a percentage of the sales price when online shoppers buy products after clicking on an affiliate’s website link to a product on, No. 1 in the Internet Retailer 2015 Top 500 Guide, or other retailers. The Louisiana law, enacted during a recent 25-day special session of the legislature, deems an online retailer to have a physical presence in the state, or “nexus” in legal terms, if it works with online affiliates based in Louisiana. That nexus triggers the requirement to collect sales tax and remit it to the state. The law took effect April 1.

Amazon did not respond to a request for comment or say how much its affiliates might lose in revenues, but its affiliate website lists Louisiana residents as being ineligible to participate. Other states whose residents cannot participate in the program are Arkansas, Maine, Missouri, Rhode Island and Vermont.

Richard Carbo, communications director for Louisiana Gov. John Bel Edwards, says the state is “in a severe budget crisis” and the so-called Amazon tax was one of many options the legislature approved to raise money.

Carbo says state officials were not clear how or when Amazon, which has no employees or physical presence in Louisiana, would respond to the new law.


Amazon’s move is the latest in a lengthy battle over whether states can require out-of-state retailers or their affiliates to pay use taxes or sales taxes on online purchases. A 1992 U.S. Supreme Court ruling declared that an out-of-state retailer without any physical presence in a state, such as a store or warehouse, could not be required to collect and remit sales tax to that state. Two states—Colorado and Alabama—have enacted laws that appear to contradict that ruling in hopes they can get either a vote in Congress or bring the issue back to the U.S. Supreme Court for a review that would take into account the growth in online shopping. Of the 45 states and the District of Columbia that collect sales taxes, 24 states have instituted some form of simplified collection process for out-of-state online and catalog retailers who voluntarily collect the tax. Another 13 states are considering legislation requiring the sales-tax collection, according to the National Conference of State Legislatures. Five states—Alaska, Delaware, Montana, New Hampshire and Oregon—do not have a sales tax.

Yet states have less to gain than when the debate started, because Amazon now collects sales tax in 25 states where it has a physical presence, in many cases fulfillment centers. Those states comprise 77.5% of the U.S. population based on U.S. Census Bureau data. data shows Amazon’s global online sales grew to an Internet Retailer-estimated $79.480 billion in 2014, up 17.1% from $67.855 billion in 2013.