Amazon.com ditches RI web sites

PROVIDENCE, R.I. (AP) - Amazon.com has terminated ties with Rhode Island Web sites that make referrals to the online retailer because a law designed to collect sales taxes on these transactions will soon come into force.

The Providence Journal on Tuesday reported that Seattle-based Amazon wrote to web site operators, telling them its “ Associates program” ended Monday. Web sites that posted links to the company about its products have received up to a 15 percent cut on sales.

The state legislature has passed a budget provision that would force Amazon to collect 7 percent in sales taxes on these so-called “click-through” transactions.

Amazon argues the law is unconstitutional, so eliminating the commission would prevent the company from having to collect the sales tax most consumers pay on purchases at in-state stores.

Rhode Island taxpayers currently must pay sales taxes for out-of-state purchases on their annual tax return, but it’s an honor system.