I'm not up on all the details, but my first impression is this simply gives Amazon an excuse to dump affiliates and keep more money for itself; drastically reduce the number of small time sellers, similar to what eBay has done over the past couple of years. Perhaps that's way off base, but was what first came to mind when I saw the news articles.
If Amazon wanted to drop their affiliate program, they could do that at any time. If they wanted to drop non-producing affiliates, all they have to do is change their program terms. Easy. Merchants drop people (for various reasons) or terminate their affiliate programs all the time
But the real fun begins with all the arcane rules as to what's taxable, exemptions, and collection - filing and remitting payment to all the different jurisdictions; some states make it easier than others, but still, even for an active small-time seller, could easily result filing in a few dozen states.
Yep - and that's why it's a problem.
This goes much farther than Amazon - it affects EVERY company that sells merchandise online and has an affiliate program (because that's what establishes the nexus - more on that in a second). There are hundreds of merchants that have dropped affiliates in affected states. Smaller merchants can't cope with the complexity as mentioned above. There is speculation in some places that eventually this will go national and then the payment processors will get in on handling the messy details - for a fee.
It is having a devastating effect on the livelihoods of people who are in the affiliate marketing industry. Some of the larger ones (like Fat Wallet) simply moved elsewhere, not everyone can do that.
Affiliates aren't employees of they're publishers. Amazon and the like are advertisers. Magazine publishers don't create a nexus for a company if someone buys an issue off the newsstand, sees an ad, picks up the phone and buys something. Affiliates are being singled out unfairly, solely because the advertising channel is trackable. Think about it.
These laws, while labelled with soft-and-fuzzy names like "Main Street Fairness", are being driven by the "big box" stores - the Wal Marts, theBest Buys ... who are well known for their negative effect on those same "Main Street" businesses wherever they pop up. This is one way to drive away their online competition. Meanwhile, all those big merchants already have a physical presence in those states and are already collecting those taxes and filing in those states. (By having a physical presence, they're also using a much bigger share of the municipal services which those taxes help pay for.)
There are already laws that say if you buy something out of state you have to pay sales tax on it. If people aren't doing that, find some way to enforce it. How many of the politicians pushing these laws do you think report all of THEIR out-of-state purchases on their tax returns?
Three states which have passed these laws have looked or are looking into repealing them because they generated no additional revenue.
I'm just thankful that the idiot(s) running my state haven't gone down this road ... yet ...