New York State has launched a frontal attack on ecommerce recently by initiating a tax by passing legislation that would require Merchants with Affiliates in New York to be sales tax. Amazon is fighting the law tooth and nail as those Merchants with the most to lose are the online pureplays who enjoy the not having nexus (a taxable presence) in many states.
Overstock.com has decided to fire all their affiliates based in New York. The letter below, dated May 13, 2008, just went out to their Affiliates. This is simple math for Overstock.com - New York is probably a good chunk of their business and why risk hurting sales in New York by having to charge sales tax to people who live in New York City. Overstock has decided to throw their long standing Affiliates under the bus as opposed to standing by them.
The conversation has already started over at ABestWeb.