Is not about taxing the items that are sold (as you are already supposed to report these on your state tax filing) but Amazon would be required to tax money it pays out to affiliates. This is a double taxation! Amazon is already required to pay any business tax on itself and the affiliate that receives money from Amazon needs to report this as income (to be taxed).

There is a business in Asheville NC that derives approximately 2/3rd's of its income from Amazon affiliate sales. Now the NC legislature wants them to be taxed on it once when the payment is actually made and again when they pay income tax? As a result the business is closing up shop in NC and moving to another state. Way to go NC! No not only are they not going to get the affiliate tax money their greedy little hands so desired, they will also be missing out on the income tax the owners paid, the other local businesses that supported the moving business will be hurt (more lost tax revenue), shops and restaurants they ate at, etc... the list goes on and on and on. Our governor actually was saying how this was such a good thing (the tax) and it was a way to "make up" the budget deficit. What an idiot.