Amazon to cut California affiliated Web (AP)

SAN FRANCISCO - Amazon.com Inc., said Wednesday that it will stop working with subsidiaries in line based in California, given that the State has adopted a new rule which requires the online retailers to collect sales tax it.

In an e-mail Wednesday to California affiliate - specific or companies that operate Web sites that refer visitors to Amazon and then to obtain a reduction of any sale resulting - said Seattle-based company it would cut ties with persons residing in the country's most populous state, if the Act came into force. Governor Jerry Brown signed the legislation Wednesday as part of a larger program of the State budget.

The rule requires as Amazon online retailers to collect sales taxes if they have affiliates in State.

In his e-mail, Amazon has called the Bill "unconstitutional" and "counterproductive."

Adoption of the Act, which is projected to net 200 million dollars a year, adds California to a growing list of States which have adopted this legislation in the hope to bring more tax revenues.

Billions of dollars are in game, as a growing number of States look for ways to generate more revenue without violating a Supreme Court decision of United States of 1992 which forbids a State to require companies to collect sales taxes, unless the company has a physical presence such as a store, in this State. When consumers order to outdoor retailers, that they are supposed to pay the tax owed, but they are seldom and it is difficult to enforce.

States try to work around the limitation of the Supreme Court by passing laws that broaden the definition of a physical presence. Online retailers, resistant during this time, being loaded as collectors of taxes.

California will become the most recent State in which Amazon has parted ways with members of the Amazon Associates program. Already, he said goodbye to societies affiliated to the States including Arkansas, Connecticut, and Illinois due to the adoption of similar laws online sales tax. More small competitor Overstock.com Inc. has a component of its affiliate programs in several States because of the laws.

California has adopted such a law in 2009, but then-Governor Arnold Schwarzenegger vetoed.