Amazon Cuts Out Colorado

Government… looking out for you.

Kristie McNealy blogs from her suburban Denver home about raising four children and health issues. Her husband, Rob, a floor installer, runs another Web site offering product reviews and advice on hardwood floors.

It’s not just for fun. Whenever someone clicks on a link to buy a book or product that their sites mention from an online seller, the McNealys get a commission. And if that customer comes back the next day to that same retailer and buys a television, they get a cut of that, too.

Last week, the McNealys, along with at least 4,000 others like them, lost a chunk of their business when Amazon.com announced it was cutting ties with its Colorado-based affiliate marketers — Web sites and bloggers that help it sell products.

In severing those ties, Amazon blamed a new state law requiring it to collect up to an estimated $4.6 million in online sales taxes a year, which will help the state close a $1.3 billion budget shortfall.

Kristie McNealy said the move will mean a loss of roughly $300 a month, money that has helped make up for a drop in her husband’s income during the recession and enabled her to stay home and homeschool her children. She worries other companies may follow Amazon’s lead.

“Losing the Amazon account has been a financial blow, but losing the rest of our accounts will change the way my husband and I do business and provide for our family,” McNealy said.