A Taxing Issue Pt. 3: Your Money or Your Ads

Online discounter Overstock.com is pulling its more than 3,400 New York affiliates as of June 1, in response to the state’s new law requiring Internet merchants with in-state affiliates to collect sales tax. Overstock will reinstate its New York affiliates if New York repeals the law, or if courts void its interpretation of affiliates as sufficient to establish “nexus” in the state. (Amazon.com is challenging the statute.)

"We have worked to assure that Overstock.com has as small a tax footprint as possible because of the benefits it provides to our customers,” David Chidester, Overstock’s senior vice president of finance, said in a statement. In theory, it should make no difference to customers, who are legally obligated to pay state sales tax whether or not the merchant is required to collect it. In practice, however, so many online shoppers don’t that New York estimates the state is losing $47 million dollars a year. — Meredith Schwartz