Overstock.com Drops New York Affiliates

I throw out lots of opinions and speculations here. Generally, I am totally serious, but last month it was with hyperbole that I wondered if Amazon would stop working with New York affiliates.

That question stemmed from New York State’s new law mandating that online retailers collect sales tax on Internet purchases to state residents, even when the retailers have no tax nexus in New York.

This was the brainchild of disgraced former Governor Eliot Spitzer, and his successor David Patterson carried the torch of this desperate, unreasonable ploy to compensate for excessive state debt.

Anyhow, Amazon filed a complaint in State Supreme Court in Manhattan objecting to the new law.

But since this new tax kicks in on June 1, online retailers can’t hold out for the resolution of the Amazon complaint.

Today the Small Business Blog reports that Overstock.com has issued a notice to all New York state affiliates that they are being dropped from the Overstock Affiliate Program, effective May 20, 2008.

The email sent today by Overstock references a letter from Geoff Atkinson, Vice President of Overstock, with additional details of the situation.

That is an unfortunate, yet understandable move. I expect to see other large online retailers do the same.

Nice work, Governor Patterson. You’ve effectively put innumerable small business people in New York out of work, and more are likely to follow.

Maybe, just maybe, you shouldn’t rubber stamp everything in your inbox from the Spitzer days. I’m just saying.