Amazon is challenging the legality of a New York law passed in 2008 that requires it to collect taxes based on its affiliates. While thus far Amazon has stuck it out in New York and abided by the rule, the case is currently in the state appeals court.
Hawaii Amazon dumped Hawaii affiliates in 2009 as a battle with the state over sales tax escalated. On March 8, 2011, a Hawaii bill was passed in the House and transmitted to the Senate. The bill creates a nexus standard for taxing out-of-state business and Internet retailers/affiliate business.
Rhode Island Amazon broke ties with Rhode Island in 2009 after its legislature passed a bill that would require the Internet retailer to begin collecting sales tax.
North Carolina Amazon no longer has an affiliate program in North Carolina. The company broke ties in June 2009.
South Dakota On March 10, South Dakota's governor signed a bill that enacted reporting regulations for out-of-state retailers and expanded the definition of nexus to include out-of-state retailers in order to collect taxes on Internet sales.
Massachusetts Massachusetts introduced a bill to protect Main-Street retailers and promote sales tax fairness. The bill would require out-of-state retailers with Massachusetts affiliates to collect and remit sales tax.