By  on June 11, 2008

NEW YORK — A New York state law that went into effect June 1 could signal the beginning of the end for the online retail tax exemption. Alternatively, it could greatly restrict the use of affiliate marketing, which has helped fuel the growth of social media sites and been particularly useful for bringing shoppers to online retailers that don't have physical stores.

Since the law took effect, online retailers Overstock, eLuxury and others have dropped thousands of New York-based bloggers and other online sites from their affiliate marketing programs to avoid having to charge New York residents sales tax.

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