The fate of the “Amazon tax,” which extends the definition of retailers doing business in a state for sales tax purposes to include online retailers paying commissions to in state affiliates, could be determined as early as January when the New York Appellate Division is expected to announce a decision on Amazon and Overstock’s challenge to the New York law.  If the court upholds the New York law, however, pressure will mount for other states to follow suit as already – two months into fiscal year 2010 – 24 states project budget shortfalls of 10 percent or more for fiscal 2011 (including 5 states projecting a shortfall in excess of 25%).   CLICK HERE TO SEE WHICH STATES TO WATCH.

As Amazon and other retailers have terminated affiliates in states adopting the law, to the extent other states are going to adopt the law – are affiliates better off if more states adopt the law since eventually the termination option will not be economically viable to retailers?

ILC founder Bennet Kelley will be on panel discussing the Amazon Tax this Friday afternoon at Affiliate Convention at the Hyatt Regency Century Plaza in Los Angeles.

More Info:  The Center for Budget and Policy Priorities, a prominent Washington think tank, which calls the Amazon tax an “important tool” for states, recently issued a report Amazon’s Arguments Against Collecting Sales Taxes Do Not Withstand Scrutiny.