BinaryWolf

Overstock.com sent a boiler plate rejection letter out to their affiliates via Commission Junction’s internal email this afternoon.

June 30, 2009

Dear Affiliate:

We regret to inform you that the North Carolina, Rhode Island, California and Hawaii state legislatures have or are about to pass unconstitutional tax nexus and collection laws in an attempt to force Internet retailers to collect and remit sales tax on all sales to residents of these states.

These legislative measures purport to establish a state tax nexus on the basis of contracts with local advertising affiliates, even when none exists under U.S. Supreme Court precedent. Overstock.com, Inc. (”Overstock”) has no tax nexus in any state other than Utah.

Due to the passage or eminent passage of these unconstitutional laws, Overstock regretfully must discontinue its relationships with all of its advertising affiliates in these states.

Accordingly, it is with reluctance that Overstock hereby gives notice of termination of your participation in Overstock’s Affiliate Program.

Any money owed to you, based on your advertising services prior to termination, will be paid in the normal course of business.

Overstock regrets that it has been put in this position. In the future should these laws be vetoed, declared unconstitutional, or repealed, we will cheerfully resume our former business relationship.

Respectfully,

Jonathan E. Johnson III
President
Overstock.com, Inc.

Affiliates that receive these removal letters should send a copy of the text directly to your representatives and ask them why they did nothing to protect your business from financial loss.

Find your Assembly person and Senator here.