In March 2011, Illinois' governor signed a law that forces online retailers that work with affiliates in the state to collect sales tax on purchases made by residents.
Starting in July, any business with an affiliated presence in Illinois will be required to collect a 6.25% sales tax.
Illinois has estimates that it loses between $153 million and $170 million in sales tax revenue annually due to retailers not collecting the tax.
In response, Amazon made good on its threat of cutting its ties with Illinois affiliates. Its affiliate program will be terminated on April 15."We play by the same rules as other retailers, as the national chains collect online only for states where they have physical stores," Paul Misener, Amazon's vice president for public policy, said in a statement.
Vermont Vermont's House passed a bill on March 10, 2011, that would require affiliates of online retailers and other Internet businesses that perform more than $10,000 in sales a year to collect a 6% sales tax starting on July 1, 2012. The new regulation would result in about $30 million of new revenue for the state. The bill is moving to the Senate for consideration. Amazon has not said whether or not it will end its partnerships in the state.