Salt Lake City-based Overstock.com has dropped its California affiliates, the firm told its affiliates Wednesday, after that state passed a Internet state tax nexus law which taxes out of state retailers. Overstock joined Amazon.com and other e-commerce firms who have cut off ties with California affiliates. California is just the latest state where affiliates have been severed by Overstock, as states have attempted to tax out-of-state e-commerce firms to bridge severe budget gaps. Overstock and others use affiliate programs to help drive customer referrals to their web sites.