It seems there may be some unintended consequences of Minnesota’s new online tax. The St Paul Pioneer Press reports…

In advance of having to collect online state sales tax, Amazon.com said Tuesday that at the end of the month it will sever ties with its Minnesota-based affiliate websites that receive a fee for referring shoppers to the retail giant’s online store.  …

What’s new in Minnesota is the law requiring the vendor, such as Amazon, to collect the taxes upon purchase. By ending the affiliate relationships, Amazon exempts itself from that obligation, but that doesn’t exempt the consumer.

Amazon also has ended affiliate relationships in other states that have passed similar laws, such as California.

There are about 5,200 affiliates in Minnesota that make money from online advertising, said Rebecca Madigan, executive director of the Performance Marketing Association, a trade group that represents the affiliates. …

The change in Minnesota’s state law affects about 1,000 online retailers — not just Amazon.com — Madigan said. The 5,200 affiliates in Minnesota generated a total of about $500 million worth of business in 2012 and paid about $35 million in state income tax, she said.

Because of the new online sales tax law, “the state is actually going to lose money” from the affiliates, Madigan said, “because they’ll lose that income tax revenue.” About three-quarters of the businesses have fewer than four employees.