Overstock.com is canceling services of its affiliate advertisers in Hawaiçi and three other states following the legislature’s passage of a law requiring Internet retailers to collect taxes if they have local affiliate advertisers.

Overstock’s move mirrors that of Amazon.com, which sent termination letters to its owners of Web sites in Hawaiçi who post Amazon.com ads on their sites and get a referral fee if visitors click through and make a purchase.
Gov. Linda Lingle yesterday indicated she may veto the legislation on collecting taxes on purchases made from an affiliate referral.