There are a growing number of states in the US that are implementing taxation policies that are driving out many major vendors that use affiliate marketing.

This is a policy that started last year, originating in New York, and can potentially kill affiliate marketing.

This past Friday, Rhode Island issued notices to over 100 online businesses that they require states sales tax to be collected. Three major businesses – Amazon, Overstock and BlueNile told their Rhode Island based affiliates that they would no longer be able to promote their products, the Providence Journal reported.

It was announced earlier in the week, that Overstock had already dropped North Carolina, Rhode Island, California and Hawaii affiliates.

California Governor Arnold Schwarzenegger joined Hawaii Governor Linda Lingle to veto these taxes.

Clickz reported that some companies are appealing the laws in New York.

Here is another perfect example of how taxes hurt small business and kill jobs?

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