We wrote about North Carolina and Amazon, the sales tax issue that led to Amazon dropping all the affiliates in North Carolina. Now California is raising the same issue. To learn more about your particular state and the North Carolina issue see our most recent post about the Performance Marketing Association.
Amazon said, through their Public Policy VP Paul Misener in a letter in February that Amazon would do just that. If necessary Amazon would end their affiliate relationship with all the Amazon affiliates in California estimate at around 10,000. This is an interesting issue that should be watched closely, particularly what your state is doing as other affiliate programs may follow California.