Via Mark's Hangout:
On June 29, 2011 California Governor Jerry Brown signed a tax bill that forced out-of-state retailers to collect sales tax on purchases made by California residents if those retailers had a "nexus" within California. Upon the signing of the bill, Amazon immediately terminated its thousands of California-based Associates thus elminating the "nexus". Shortly thereafter, Amazon began a referendum process to allow California voters to overturn the new law.
More recently, Amazon extended an olive branch to Governor Brown and the California legislature and a compromise bill was introduced. Assembly Bill 155 requires Amazon to start collecting sales tax on purchases made by California residents starting in September 2012 if the Amazon is unable to come up with a federal deal in which a uniform online sales tax policy is adopted by Congress by next July. On September 23, 2011 Governor Brown signed AB 155.