The state of New York recently passed legislation which requires any company with affiliates in the state to collect taxes on any items sold in New York. That covers companies like Amazon which allow individual bloggers and web site operators to add links to Amazon products on their web sites. Amazon doesn't actually have any warehouses or business offices in New York. But thousands of New Yorkers who blog who run part time businesses from their home are considered representatives of the company under the state law, which means Amazon has to collect taxes.
Yesterday, Overstock.com decided that the easiest way to avoid paying taxes was to temporarily suspend its relationships with New York-based affiliates. But Amazon, which has already vowed to fight the new law in court, must be making a fair amount of money from New York based affiliates, because the company will instead collect taxes until the issue is resolved, even if that discourages some New Yorkers from buying products through Amazon.