Amazon Drops IL Affiliates – Quinn Nexus Tax

by Jhet Bhlak on March 11, 2011

Illinois has been working hard to drive businesses out of the state and increase the tax burden on the middle class. And in the latest stage of this war, yesterday, Governor Quinn signed into effect bill HB3659. Thereby, making it to the top of my “What A Jackass” list.

For those of you that don’t know, what part of this bill does in essence is to require affiliate programs to collect state tax from the state that an affiliate marketer refers customers from. That doesn’t sound so bad right?

Well what this really does is to place an undo burden on companies, such as Amazon.com, that pay affiliate marketers. And what the end result is, is that jobs are now forced out of IL.

Wait, how could that possibly force jobs out of the state? I have to be deluded or joking right? Well I’m sorry to say that I am neither. My life would be easier if I were. The following letter details exactly how this causes job loss for IL:

Hello,

For well over a decade, the Amazon Associates Program has worked with thousands of Illinois residents. Unfortunately, a new state tax law signed by Governor Quinn compels us to terminate this program for Illinois-based participants. It specifically imposes the collection of taxes from consumers on sales by online retailers – including but not limited to those referred by Illinois-based affiliates like you – even if those retailers have no physical presence in the state.

We had opposed this new tax law because it is unconstitutional and counterproductive. It was supported by national retailing chains, most of which are based outside Illinois, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that its enactment forces this action.

As a result of the new law, contracts with all Illinois affiliates of the Amazon Associates Program will be terminated and those Illinois residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, or SmallParts.com. Please be assured that all qualifying advertising fees earned prior to April 15, 2011 will be processed and paid in full in accordance with the regular payment schedule. Based on your account closure date of April 15, 2011, any final payments will be paid by July 1, 2011.

You are receiving this email because our records indicate that you are a resident of Illinois. If you are not currently a permanent resident of Illinois, or if you are relocating to another state in the near future, you can manage the details of your Associates account here. And if you relocate to another state after April 15, please contact us for reinstatement into the Amazon Associates Program.

To be clear, this development will only impact our ability to continue the Associates Program in Illinois, and will not affect the ability of Illinois residents to purchase online at www.amazon.com from Amazon?s retail business.

We have enjoyed working with you and other Illinois-based participants in the Amazon Associates Program and, if this situation is rectified, would very much welcome the opportunity to re-open our Associates Program to Illinois residents.

Regards,

The Amazon Associates Team

That’s right. Rather than try and jump through the rediculous tax hoops designed by our demented Governor, Amazon is TERMINATING all existing business relationships with IL residence. In other words, we are fired.

But why would Governor Quinn do this? Is it ignorance? Stupidity? Hatred of middle America? Or is it love of big business? Who is benefiting from this bill? Big business like Walmart, Sears and Target. That’s who. And here I thought Democrats were all about the little people.

So what do you do?

Well one way to get re-instated into Amazon’s affiliate program is to move out of IL. But that isn’t practical for most people. What I’m going to do is form my company in another state. There are some hoops you have to jump through to set it up properly but it is a viable solution. Once I have completed the process for myself I will be setting up a “how to” eBook so that others can do the same.

* If anyone has questions or comments to help people who have been affected by this please feel free to leave them below. *

Read more about this issue here: http://illinoisreview.typepad.com/illinoisreview/2011/03/gov-quinns-internet-tax-folly.html

{ 3 comments… read them below or add one }

Jhet March 14, 2011 at 10:12 am

Here is a nice map from CJ that details the status of similar taxes in other states:

http://www.cj.com/news/internet_tax.html

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Carlie March 18, 2011 at 9:30 am
Jhet Bhlak July 6, 2011 at 11:10 am

California just followed IL with regard to creating a nexus tax:

http://www.ecommercetimes.com/story/Spurned-Affiliates-Gnash-Teeth-Over-Calif-E-Commerce-Tax-Law-72781.html?wlc=1309971999

It’s telling that the ones truly pushing for the nexus taxes are big businesses such as Walmart.

Well Governor Brown, congratulations on instantly killing 25,000 small businesses and many times that number of jobs!

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