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Amazon.com drops Illinois affiliates in the wake of internet tax
American Thinker ^ | 03/14/2011 | Meredyth Richards

Posted on 03/14/2011 6:57:24 AM PDT by SeekAndFind

Last Thursday, Illinois Governor Pat Quinn signed into law the "Mainstreet Fairness Bill" and immediately imposed new taxes on all online retailers with business partners in the state. For the Democrats in charge, passing the largest tax hike in the Prairie State's history this past January, adding the equivalent of $1,600 per year to the average personal income tax bill, was apparently not enough of an assault on those of us who still - albeit foolishly - live in financially and politically bankrupt Illinois. 

Rather than place the burden for cleaning up the state's budgetary mess only on physical residents of Illinois, Governor Quinn and a totally complicit legislature (Republicans included) have now forcefully enlisted the help of innocent outsiders. The new legislation requires internet stores, even those without a single outlet in the state, collect and remit taxes for all sales made through their Illinois-based affiliates. Doing so purportedly levels the playing field between brick-and-mortar businesses who must tax purchases and their untaxed online competitors.

But more than merely increase the cost of living for Illinoisans in yet another way, the law also has unfortunate consequences for non-profit and philanthropic organizations. Immediately following the bill's passage Amazon.com notified its Illinois affiliates that as of April 15th their contracts with the Amazon Associates Program will be terminated.

The all-volunteer group I lead, the Chicago Young Republicans, received this notice, making us one of the thousands of affiliates unable to use online Amazon advertisements as a fundraising tool. No longer will purchases linked from our website made on Amazon.com
(and any of our other advertising partners that inevitably choose to end relations in Illinois) support our 1,000-member organization.

While discontinuing the advertising program has relatively little total impact on Amazon in particular  - affiliates contribute less than 10% of the site's overall sales - it matters greatly to businesses dependent on out-of-state internet retailers for their income or, as in our case, for help fundraising. 

In the rush to placate and prop-up those who cannot compete with the online marketplace, Springfield has now dealt a serious blow to the 9,000 affiliates in Illinois who are estimated to lose at least 25% of their income when online outlets end their contracts in the state. Holding residents captive to a high sales tax is one thing; declaring outsiders pay up as well at the expense of local business is another. But then again, perhaps this equitable distribution of fiscal misery is the real "fairness" referenced in the law's title.  


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events; US: Illinois
KEYWORDS: amazoncom; illinois; internettax; taxes; taxincrease

1 posted on 03/14/2011 6:57:31 AM PDT by SeekAndFind
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To: SeekAndFind

Going Galt is in fashion nowadays..............


2 posted on 03/14/2011 7:00:06 AM PDT by Red Badger (How can anyone look at the situation in Libya and be for gun control is beyond stupid. It's suicide.)
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To: SeekAndFind

Bookmarked for later.


3 posted on 03/14/2011 7:01:17 AM PDT by Ballygrl
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To: SeekAndFind

Let’s just keep finding ways to kill business. That’ll show ‘em.


4 posted on 03/14/2011 7:01:24 AM PDT by Past Your Eyes (I'd get it myself but I don't have any thumbs.)
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To: SeekAndFind
Suppose I live in CA and buy something from Amazon in IL. Just exactly where does the transaction take place? If the answer is in CA, then IL, by Fed Law, cannot tax the transaction. If you say the transaction took place in IL, I will argue that I controlled the transaction through the presented screens on my computer in CA.

In short, the transaction was an inter-state transaction.

I can't wait for this one to go to the US courts.

5 posted on 03/14/2011 7:04:27 AM PDT by mlocher (USA is a sovereign nation)
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To: SeekAndFind

That should bring in a lot of revenue...


6 posted on 03/14/2011 7:05:25 AM PDT by WayneS (Enlightened statesmen will not always be at the helm. -- James Madison)
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To: SeekAndFind

Im getting notices that my state (OK) is now charging tax on all internet sales. Will have to pay.


7 posted on 03/14/2011 7:07:56 AM PDT by dalebert
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To: SeekAndFind
Amazon and Texas are having a similar battle.

FR thread: Amazon closing Tx center amid dispute
8 posted on 03/14/2011 7:09:53 AM PDT by TomGuy
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To: mlocher
I can't wait for this one to go to the US courts.

This has already gone all the way to the Supreme Court. Unless a business has a physical presence in the state, you cannot make them charge sales tax. States like Illinois and California are trying to argue that the in-state affiliates provide that nexus that allows them to tax companies like Amazon. So when these laws pass, Amazon simply ends the affiliate program for that state. It doesn't hurt Amazon, doesn't help the state, but is devastating to those affiliates that need the revenue from the advertising...

9 posted on 03/14/2011 7:09:53 AM PDT by CA Conservative
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To: mlocher

Amazon is not in Illinois, though, it is in Washington. So if you go to a website that sits in Illinois and click on an Amazon link, you are now in Washington. That is where all sales are conducted. And why these States are cutting their own throats by trying to get a Washington based retailer to collect taxes for them.


10 posted on 03/14/2011 7:10:11 AM PDT by Anitius Severinus Boethius
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To: All

Gov. Pat Quinn says “Let them eat cake” while businesses flee confiscatory taxes. Let Boeing or Cat announce a headquarter move and watch the panic set in. You can’t tax yourself to prosperity. It’s been tried and failed every time.


11 posted on 03/14/2011 7:11:53 AM PDT by BipolarBob (I'm BiPolar,BiWinning AND have a clean drug test. Questions? Call 1-800-CharlieSheen)
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To: dalebert
Im getting notices that my state (OK) is now charging tax on all internet sales. Will have to pay.

Dang. I was going to get a p.o.box across the line (I live about 300 feet from the OK line), because the Arkansas Senate passed an internet tax bill.

It looks like the days of no-tax on internet purchases is over.
12 posted on 03/14/2011 7:12:05 AM PDT by TomGuy
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To: CA Conservative

Thanks for the explanation!


13 posted on 03/14/2011 7:17:35 AM PDT by mlocher (USA is a sovereign nation)
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To: Anitius Severinus Boethius

Thanks for the info.


14 posted on 03/14/2011 7:20:18 AM PDT by mlocher (USA is a sovereign nation)
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To: TomGuy

RE: Amazon and Texas are having a similar battle

Texas too? I would have expected the Lone Star State to have more sense than that.


15 posted on 03/14/2011 7:29:25 AM PDT by SeekAndFind
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To: CA Conservative

RE: Unless a business has a physical presence in the state, you cannot make them charge sales tax.

____________________________________________________________________

Well, this is where Obama and his Democratic friends come in to support their Democratic buddies in blue states like Illinois and elsewhere (Illinois will be the pioneer as this is where Chicago and Rahm Emanuel are ).

And if it ever goes to Court anywhere in the US, you can be sure Obama and his justice department will invoke the time-honored “Commerce Clause”.


16 posted on 03/14/2011 7:33:34 AM PDT by SeekAndFind
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To: TomGuy

it will certainly slow my shopping ..we also require permits for Garage sales and limit them to one every six months


17 posted on 03/14/2011 7:35:35 AM PDT by dalebert
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To: BipolarBob

It doesnt matter if you cant tax yourself into prosperity. your gov wants it all..from your small 2 bit town to the feds..nothing you work for is yours. it belongs to them .


18 posted on 03/14/2011 7:37:58 AM PDT by dalebert
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To: TomGuy
Im getting notices that my state (OK) is now charging tax on all internet sales. Will have to pay.

How is this even possible? It's unconstitutional for a state to force a business from another state to collect their sales taxes for them.
19 posted on 03/14/2011 7:38:05 AM PDT by WackySam (To argue with a man who has renounced his reason is like giving medicine to the dead.)
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To: SeekAndFind

This has got to be a very stupid move by Illinois.

It would be very easy for Amazon to relocate their warehouse activities to a state that is not going to tax sales.

As far as I know Florida is open for internet based businesses.


20 posted on 03/14/2011 7:39:58 AM PDT by Presbyterian Reporter
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To: Presbyterian Reporter

RE: As far as I know Florida is open for internet based businesses.

Yep, and so will the states neighboring Illinois. I wouldn’t be surprised if Wisconsin poaches them.


21 posted on 03/14/2011 7:42:01 AM PDT by SeekAndFind
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To: SeekAndFind

Just hear an interview w/ Fat Wallet (internet performance advertising site) who is in my community.They will now be leaving Illinois. They have already received cancellations from the likes of Amazon. They would lose 40% of their business if they stayed. They (and all the others like them) warned the lawmakers. Apparantly, these idiot lawmakers thought they were bluffing.


22 posted on 03/14/2011 7:43:46 AM PDT by Lets Be Frank
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To: SeekAndFind

Its the everything clause. There is nothing they can’t justify using that clause.


23 posted on 03/14/2011 7:56:38 AM PDT by wiggen (The teacher card. When the racism card just won't work.)
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To: mlocher

Here’s something I only found out recently, and I cannot vouch for the accuracy of the information. It was stated by the host of a local talk show.

In Alabama, say you are on vacation in Florida and buy something. You are supposed to remit to the state of Alabama the Alabama sales tax on that item.

Huh??


24 posted on 03/14/2011 7:59:23 AM PDT by chesley (Eat what you want, and die like a man.)
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To: SeekAndFind
Illinois is going to find out how easy it is to move any business that is essentially a large data file, to an out of Illinois server.
25 posted on 03/14/2011 8:09:07 AM PDT by Navy Patriot (Sarah and the Conservatives will rock your world.)
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To: SeekAndFind

So Amazon won’t do business in Illinois or Texas over taxing. At this rate, they’ll be down to a handful of states by 2015.


26 posted on 03/14/2011 8:22:01 AM PDT by OrangeHoof (Washington, we Texans want a divorce!)
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To: SeekAndFind

With Gov. Rick Scott here in Florida we are going to be a very business friendly state, so any businesses who are fed up in other states will be flocking to this state.


27 posted on 03/14/2011 8:22:26 AM PDT by sheikdetailfeather ("Kick The Communists Out Of Your Govt. And Don't Accept Their Goodies"-Yuri Bezmenov-KGB Defector)
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To: OrangeHoof
So Amazon won’t do business in Illinois or Texas over taxing. At this rate, they’ll be down to a handful of states by 2015.

I suspect Texas, being a mostly conservative state, will drop the tax. Other liberal states will institute this tax.

Amazon will deal with the smarter states.

28 posted on 03/14/2011 8:26:18 AM PDT by Lazamataz (NPR is the ACORN of the media world.)
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To: chesley
In Alabama, say you are on vacation in Florida and buy something. You are supposed to remit to the state of Alabama the Alabama sales tax on that item.

Here in Wisconsin we have what is called a "sales and use tax". What this basically means is that If you buy an item for your own use it's subject to sales tax. If you didn't pay the (sales) tax when you bought it you are supposed to pay the (use) tax to the state.

I would suspect that the compliance is really low, but this is and has been for quite some time, the law of the land.

29 posted on 03/14/2011 8:32:12 AM PDT by BlueMondaySkipper (Involuntarily subsidizing the parasite class since 1981)
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To: OrangeHoof
So Amazon won’t do business in Illinois or Texas over taxing. At this rate, they’ll be down to a handful of states by 2015.

Not exactly. Amazon will still do business in Illinois, Texas, Colorado, and other states that do this. They will just sever ties to any affiliates in those states. What this will ultimately do is lower the taxes paid to those states, as their in-state businesses lose income and jobs...

30 posted on 03/14/2011 8:37:37 AM PDT by CA Conservative
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To: Lazamataz
I suspect Texas, being a mostly conservative state, will drop the tax.

Don't be so sure about that. The legislature's constituents include a lot of small businesses that have never liked the concept of collecting state taxes when internet companies don't, creating an unfair competition. The small businesses are made up of voters who live in the districts and vote in local elections. The out-of-state internet companies do not.

So who's side do you think the legislators will take?

My point is that if Amazon decides they won't do business in states that tax them or their affiliates they will eventually find themselves with no American business. If they won't do business in Illinois, Texas, New York and California, what are their hopes of long-term profitability?

31 posted on 03/14/2011 10:47:12 AM PDT by OrangeHoof (Washington, we Texans want a divorce!)
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To: OrangeHoof
If they won't do business in Illinois, Texas, New York and California, what are their hopes of long-term profitability?

Who said they aren't "doing business" in Illinois?

You can still go to Amazon.com and they will take your order.

Do you understand what Amazon has done and what the law passed by Illinois does?

32 posted on 03/14/2011 12:41:35 PM PDT by Anitius Severinus Boethius
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To: Anitius Severinus Boethius
Do you understand what Amazon has done and what the law passed by Illinois does?

Yes I do. Amazon is fleeing from places that want to levy sales taxes against their business, even if it means hanging some of their affiliates out to dry or abandoning their own distribution centers. Eventually, they will run out of states that won't try to tax them. Then, where will they go?

33 posted on 03/14/2011 1:03:25 PM PDT by OrangeHoof (Washington, we Texans want a divorce!)
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To: OrangeHoof
Eventually, they will run out of states that won't try to tax them. Then, where will they go?

Have you ever seen a thing called a "globe"?

34 posted on 03/14/2011 1:38:19 PM PDT by Lurker (The avalanche has begun. The pebbles no longer have a vote.)
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To: OrangeHoof

You obviously do not understand then. They aren’t “fleeing” anywhere.

They are in Washington State. They will stay in Washington State. People will continue to shop at their website in Washington State even from Illinois.

What they are doing is ending their Affiliate Program with people who reside in Illinois.

Let’s create an Amazon Affiliate and see what is happening.

Let’s say Illinois resident Linda (signed up for the Affiliate program) ran a small blog about making curtains by hand, and she had a link on her site that would take a visitor to a book on curtain making on Amazon.com

Let’s say Mary, reading about curtain making, was interested in the book that Linda talked about, so she clicked on the link and bought the book from Amazon.

Amazon, noting the session started from Linda’s blog, sends Linda some money for linking to their site. If the book was, let’s say $15, the money Linda would get would be between $.60 and $1.27 depending on how far up the “ladder” Linda was.

So, the current law in Illinois says that Amazon has to collect sales tax on that sale, since it originated in Illinois with Linda’s website.

Amazon can still be open for business in Illinois, but they have decided that it is too much trouble to keep Linda, and thousands others like her, on as affiliates.

Illinois didn’t hurt Amazon at all. But they just ended a nice way for Illinois residence to make a little money on the side.

So instead of increasing tax revenue, this will be a revenue remover.


35 posted on 03/14/2011 1:52:22 PM PDT by Anitius Severinus Boethius
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To: CA Conservative

what they are trying is to charge each person who shops on the internet.


36 posted on 03/15/2011 8:18:34 AM PDT by dalebert
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To: OrangeHoof

the tax is unfair as is most tax.


37 posted on 03/15/2011 8:20:27 AM PDT by dalebert
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