[raganwald]

If an affiliate in Illinois constitutes a presence for Amazon in Illinois, what happens when Amazon Adsense Ads appear on a web site hosted out of Illinois but run by a blogger who is a resident of Illinois? By my reckoning, Amazon is paying Google who in turn pay a resident of Illinois. How is this different from an Amazon affiliate?

[evgen]

Amazon has no business relationship with the person running the ad, their relationship is with Google. The two companies are distinct entities and Amazon can easily claim to have no control over what Google does (this last bit is important because when people try to be clever and create shell companies to get around various regulations the government will try to "pierce the corporate veil" and argue that the only purpose of the shell company is to act as a hidden agent for the original company.) In the case of affiliates the states are claiming that the affiliates are acting as agents on behalf of Amazon and therefore Amazon has a physical presence in the state via those agents.

[chopsueyar]

There was a HN post about how AdSense affiliates in Philidelphia had to pay a large filing fee for being considered a business in the city.

http://news.ycombinator.com/item?id=1624250