Amazon.com Inc. has cut ties with Hawaii and Rhode Island Web sites that refer customers to the online retailer in an effort to avoid collecting sales taxes in those states.

Seattle-based Amazon notified associates in Rhode Island and Hawaii that the company was no longer working with them as of yesterday and today, respectively, because the states have passed laws to collect sales taxes on these transactions.
Amazon believes the legislation is unconstitutional, spokeswoman Patty Smith said.
In the case of Hawaii, Amazon noted in a letter to associates that the governor has until July 15 to veto the bill but that it will be effective as of tomorrow.
"In the event that Hawaii's governor vetoes this tax collection scheme, and that veto is not overidden, or in the event the law is eventually repealed, we would certainly be happy to re-open our associates program to Hawaii residents," Amazon said in the letter.
The company also recently ended its relationship with affiliates in North Carolina because it expects similar tax legislation to be passed there. And Smith said the online retailer has sent letters to the governors and legislatures of California and Connecticut, as well as other states that are considering similar legislation.
The use of marketing associates is one of several ways Amazon drives visitors to its Web site; other methods include ads on Google and links on comparison shopping sites. Amazon will not say how many associates it has, but Smith said there are "thousands" of them.
Overall, visits through associates make up a "fairly small slice" of Amazon's total traffic, and customers clicking on their links and then buying products do not provide the company with much revenue, said Lazard Capital Markets analyst Colin Sebastian.