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Amazon severs ties with Connecticut retailers over tax

June 10, 2011 12:00 am • Last Updated: June 10, 2011 8:25 pm

Hartford — Amazon.com says it is severing its relationships with affiliates in Connecticut because of a new state tax on certain online purchases.

The retail giant gave notice Friday in a letter to small retailers in the state that until now have received fees for funneling sales to Amazon. The affiliates sell products through Amazon or offer links to Amazon on their own websites.

The letter described the law as counterproductive and said it was supported by big-box retailers that are out to hurt competitors' affiliate advertising programs.

Under the new budget, sales tax will be collected when somebody purchases an item online through a website based in Connecticut.

Last month, Salt Lake City-based Overstock.com Inc. said it canceled ad contracts with Connecticut affiliates rather than collect the tax.

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