*** UPDATE *** Amazon has already sent out termination notices…
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
[ *** End Of Update *** ]
* Despite opponents claims that they’d move their companies (and their jobs) out of state if the bill was signed, Gov. Pat Quinn put his signature on what he calls the “Mainstreet Fairness Bill” today. From a press release…
Governor Pat Quinn today signed legislation to require all companies doing business in Illinois to collect and remit the legally required sales taxes. House Bill 3659 – the Mainstreet Fairness Bill – was a bipartisan initiative that passed both houses of the General Assembly with overwhelming support.
“Illinois’ main street businesses are critical to ensuring our long-term economic stability, which is why they must be able to compete with every company doing business online in Illinois,” said Governor Quinn. “This law will put Illinois-based businesses on a level playing field, protect and create jobs and help us continue to grow in the global marketplace.”
* The Illinois Retail Merchants Association explains its position in favor of the bill…
Under current state law, consumers are faced with paying back taxes and fines because these out-of-state companies did not collect the sales tax which is due and owing on every purchase. Also, Illinois business - particularly brick-and-mortar retailers - are at an extreme disadvantage because these out-of-state companies are using tax avoidance as a competitive advantage. With razor-thin margins already, that unethical advantage is lethal to Illinois retailers and has cost our state many key jobs when the economy is struggling.
* Amazon and others have said they will fire their Illinois affiliates if the bill becomes law. Some of those affiliates make big bucks. The American Booksellers Association has some harsh words for them…
“Those companies that would fire their affiliates simply to maintain an inequitable competitive advantage over retailers that obey the law clearly show their true colors. A belief that laws apply only to those who are smaller or who are unwilling to resort to threats or loopholes is characteristic of the worst sort of corporate citizen. We certainly hope companies like Amazon.com rethink their decision to fire affiliates, and we remain grateful that the governor took the tough, principled stand on behalf of in-state retailers. We hope other states follow his lead.”
* But Scott Kluth, Founder and CEO of CouponCabin.com, says his company is “actively exploring moving to Indiana.” From a press release…
“The Governor’s approval of HB 3659 is deeply disappointing. As a result, Illinois will lose jobs, many thriving businesses like CouponCabin and other affiliate marketing firms will be forced to move to other states, and most important, this law will not generate the tax revenue Illinois thinks it will collect.
“Those of us who opposed HB 3659 made every effort to persuade the Governor that it is a misguided attempt to bring ‘fairness’ and new revenue to Illinois by requiring out-of-state merchants who advertise on websites operated in Illinois to collect sales taxes from Illinois customers.”
- OneMan - Thursday, Mar 10, 11 @ 2:11 pm:
Awaiting my e-mail from Amazon, wonder if they will cut me a check for what I have earned so far?
- Fed up - Thursday, Mar 10, 11 @ 2:38 pm:
First Quinn ignores rampant workers comp fraud that makes costs skyrocket for employers now another tax to drive away good paying jobs. On top of that the Wisconsin runaways are going home so tourism takes a hit. Bad day for Illinois economy.
- VanillaMan - Thursday, Mar 10, 11 @ 2:48 pm:
So Long, Fairwell
There’s a sad sort of legislating
For new online business here
And the folks who buy online
And shedding a little tear
An absurd little tax
Is popping up to say yoo-hoo
(Yoo-hoo, yoo-hoo)
Yoo-hoo Regretfully they tell us
Yoo-hoo But firmly they compel us
to say goodbye
Yoo-hoo
To you
So long, farewell
Auf Wiedersehen, goodbye
We hate to go but this tax makes us fly
So long, farewell
Auf Wiedersehen, adieu
Adieu, adieu
To you and you and you
So long, farewell
Au revoir, Auf Weidersehen
I’d like to stay
But this tax is insane
(talking to the governor) yes?
(Governor) no!
So long, farewell
Auf Weidersehen, goodbye
We leave and heave
A sigh and say goodbye
Goodbye
(Coupon Cabin)
I’m glad to go
I cannot tell a lie
I flit, I float
I fleetly flee, I fly
Our business has gone
To Indy and so must I
(Amazon Affiliates)So long, farewell
Auf Weidersehen, goodbye
Goodbye
Goodbye
Goodbye
(Unemployed Illinoisans)
Goodbye
- John Parnell - Thursday, Mar 10, 11 @ 3:00 pm:
Amazon has been complicit in helping purchasers in Illinois avoid taxes rightfully due Illinois. User fees are not collected form most of the Illinois purchasers, and Amazon does not asist Illinois is collecting them.
Why should some Illinoisans not pay the taxes that others have to pay when purchasing the same goods? Illinois has lost out on millions of dollars because of internet companies failure to collect these taxes.
It is time the playing field was leveled for all Illinois taxpayers!
- Nuance - Thursday, Mar 10, 11 @ 3:09 pm:
Anybody know how many other states have this kind of law on their books?
One risk of moving your company to another state because of this law would be if that state enacts the same kind of law in the future. Of course if it’s that or your out of business probably a risk you have no choice but to take. Referring to the amazon affiliates of course.
- dupage dan - Thursday, Mar 10, 11 @ 3:44 pm:
I, too, am curious about other states and their stance on this law. If everyone’s doing it, where will amazon.com hide?
I am not a fan of taxes. I really dig getting stuff on line and avoiding paying the tax. Anything to stop the hated gov’t from getting their hands on my hard earned $. However, states have instituted sales taxes and they have been deemed legal. The internet is no longer the wild west - an easy software fix could allow for states to have their legitimate taxes paid. I see it on several websites when I purchase online. Other states are collecting the tax. Which ones?
- hisgirlfriday - Thursday, Mar 10, 11 @ 4:02 pm:
I will take any and all business I used to do with Amazon to the first online retailer that makes it clear to me that it is not a tax dodger and does not support tax dodging. Anyone have any suggestions?
I believe Illinois is not the only one looking at this to raise revenue and even has been at odds with Texas of all states because they tried to collect back-owed sales taxes.
- Nona in Chicago - Thursday, Mar 10, 11 @ 4:08 pm:
It’s so sad that new legislation is being enacted that will make companies pay taxes. Don’t Illinois legislators understand that it is their job to protect corporate interests at the expense of their citizens?
Here’s the funny part.
Several states have the same legislation pending, so many of these companies who say there are moving out of state will incur the expense of relocating only to have the same law impact them in their new home.
Don’t let the door hit you on your way out.
- Rich Miller - Thursday, Mar 10, 11 @ 4:17 pm:
===Don’t let the door hit you on your way out. ===
That really isn’t fair to those companies. Amazon is the bad guy here. If a company loses a huge share of its business because Amazon revokes its affiliate status, what’s it supposed to do?
- Phineas J. Whoopee - Thursday, Mar 10, 11 @ 4:19 pm:
Nona,
Your right, after all states try to get their cut these companies can move out of the country like everyone else has. Who needs high paying high tech jobs!
- wordslinger - Thursday, Mar 10, 11 @ 4:26 pm:
– But Scott Kluth, Founder and CEO of CouponCabin.com, says his company is “actively exploring moving to Indiana.” –
Yeah, you’re 20-something wizards will love the Hammond lifestyle. And you’ll probably have to keep moving, because other states are doing the same thing.
It’s too bad you’re getting squeezed, but Amazon and other others have been hosing bricks-and-mortar businesses for years.
No offense, but according to bill opponent CC the other day, when it comes to value in jobs, property value, earnings and taxes, the affiliates mean oogots when compared to Main Street businesses.
- SR - Thursday, Mar 10, 11 @ 4:27 pm:
===That really isn’t fair to those companies. Amazon is the bad guy here. If a company loses a huge share of its business because Amazon revokes its affiliate status, what’s it supposed to do?===
I agree. I won’t be buying anything from Amazon if they go through with this threat, and I sent them a letter to that effect. I don’t like paying taxes, but it’s only fair that online retailers play by the same rules. I expect other states with a sales tax and budget shortfall will follow suit eventually, if they haven’t already.
- Esquire - Thursday, Mar 10, 11 @ 4:29 pm:
Pity poor Pat Quinn!
The governor may as well pose for his official portrait now. He has been put in the unenviable position of having to sign off on all of the unpopular tax increases at the behest of the leading Democrats. These same folks will abandon him by 2014, not unlike Todd Stroger, Jr., who was left holding the bag for an unpopular sales tax increase which was one of the many wrong moves that proved to be his undoing.
Quinn will take the heat so others can lay claim to the gubernatorial seat in 2014.
- Kasich Walker, Jr.'s Consultant for Spiritual Fitness & Sport - Thursday, Mar 10, 11 @ 4:33 pm:
So if you make under $100,000 you’re asked to either write in between $3 and $52 on line 22 or be able to document that an IL sales tax rate was paid for on-line and out of state purchases and submit the difference if it wasn’t.
Gotta leave the state??
Who is and isn’t concerned about the IL budgetary problems?
States should unite & join forces against corporations with that perspective instead of undercutting each other.
Still would like to know if the state of IL and its municipalities actually collect taxes remitted with payments to utilities and telecomms.
- Demoralized - Thursday, Mar 10, 11 @ 4:34 pm:
I still have a difficult time understanding Amazon’s position. They are not being asked to personally pay the tax, only collect it. They deal in the online world. Surely they can figure out how to make system changes to be able to collect the tax. Perhaps their needs to be a law even more directly aimed at them to prevent them from completely doing business in Illinois if they cannot operate in good faith like any other business.
- General Thought - Thursday, Mar 10, 11 @ 4:37 pm:
Who knew Amazon was doing so well selling bricks and mortar.
- Fed Up State Employee - Thursday, Mar 10, 11 @ 6:13 pm:
Just consider us ahead of the curve. This isn’t a new concept, it’s been tossed around for several years. State governments will be looking in every corner for revenues and I think this will eventually be a law of the land. Just a matter of time.
- amalia - Thursday, Mar 10, 11 @ 6:15 pm:
Walmart is a brick and mortar retailer just like mom and pops. I think a well intentioned way of capturing revenue will eventually mean the demise of the small businesses it is meant to help. because anything that hurts Amazon helps Walmart.
this is also true of the federal bill that lowered the fees to debit card issuers. ostensibly, it is designed to benefit retailers. But small lenders will have a hard time competing with the paltry fees given back for the money exchange and may not be able to keep up debit card service. where does that leave the person who wants to use a debit card at a local business? and then what happens to the local business? that’s right, Walmart gets the business both ways because they are also going into the financial services business and they can fund their own debit card. Amazon is really a competitor to Walmart. and I will miss their range of services for people of Illinois and the balance they bring against Walmart.
- jerry 101 - Thursday, Mar 10, 11 @ 6:19 pm:
KWJCFSFS
Here’s a link to January 2011 voucher showing amounts being paid to municipalities from telecom taxes:
http://www.revenue.state.il.us/LocalGovernment/Disbursements/Telecom/telecomwarrantsjan11.pdf
And, yes, the utilities and the telecoms remit their taxes to the munis.
- Fed Up State Employee - Thursday, Mar 10, 11 @ 6:21 pm:
Demoralized….If you are looking for an item online that costs $100, that would be $107-$110 or so depending on your tax rate. If the item price was similar, and by not charging tax, Amazon would get a sales advantage over sites that do. Think about how much that would be with an item like a large flat screen TV. What percentage of people do you think would buy at Amazon to avoid the tax? And in turn not declare it on your tax return? High I’m guessing.
Anyone agree/disagree?
- Nick Name - Thursday, Mar 10, 11 @ 6:21 pm:
The “fairness” word again. Tax increase = fairness.
- Aaron - Thursday, Mar 10, 11 @ 7:12 pm:
Unless I have this wrong (and I might), I think a lot of people are missing the point here.
This law changes the definition of Amazon’s affiliates to make them count as a “physical presence” in Illinois. That’s why Amazon is axing the Affiliates program. No affiliates = no physical presence = they still don’t have to collect the tax.
I agree with everyone saying that Amazon has an unfair advantage, but as I understand it, this law doesn’t fix that.
- Judgment Day - Thursday, Mar 10, 11 @ 7:30 pm:
Take a different look at the situation:
First off, why would anybody be surprised that Amazon is dropping Affiliates? Contrary to what many people seem to think, calculating and keeping track of all the sales tax money and who gets what can truly become an enormous task.
It’s not only “who gets what”, but “who got what, and when”. And then Amazon will have state tax audits going on continuously, and before long you end up with an entire “Tax Compliance Division” that contributes absolutely nothing to the corporation’s bottom line.
Amazon isn’t dropping these Affiliates in anger - they are making a very rational business decision. Don’t feel sorry for Amazon at all, though.
The folks who are going to be hurt are the Affiliates. Amazon, for all their warts and issues, had a pretty fair symbiotic relationship with their Affiliates. Quite a number of very, very small companies did (and still do) quite well by Amazon.
How many of these same companies are going to do as well when they are at the tender mercies of big box chains or the likes of Walmart?
All Pat Quinn may have done is to drive the small Affiliates stuck here in IL right into the paws of an operation like Walmart, where one orders the goods from the Affiliate through a Walmart website, pays additional for S&H for either delivery or pickup at the local store, and then pays the state (and local) sales tax, and btw, Walmart gets their 30% off the top.
But not to worry, prices won’t increase…..
Yeah, right….
- CC - Thursday, Mar 10, 11 @ 7:41 pm:
I have yet to receive the letter that Governor Quinn has been sending to affiliates who wrote to him about the legislation. However, I have seen it, and it includes this very short sighted paragraph:
” Per my request, the Alliance of Main Street Fairness (AMSF) has begun a website (www.standwithmainstreet.com) to help Illinois affiliates expand their customer bases. The Illinois Department of Commerce and Economic Opportunity (DCEO) will partner with the Illinois Retail Merchants Association and AMSF to provide growth opportunities, foster an environment to create more Illinois jobs and provide online
shopping consumers with greater opportunities to save money.”
The website that the letter links to is a splash page with propaganda like language that seeks to collect my email address, presumably to receive more of the same incorrect information. I’ll pass.
I am disappointed and rather surprised that the governor would consider sending such a thing to people who opposed this legislation. Either he never really understood it or presumes that we don’t. Either is rather disheartening.
- Plutocrat03 - Thursday, Mar 10, 11 @ 8:04 pm:
Way to go building the Illinois economy Pat.
How about shafting the consumers with the phony gasification project on your desk next?
Yea, that’s the ticket….
- Sam - Thursday, Mar 10, 11 @ 8:19 pm:
Why would any company want to do business in this state?
- wordslinger - Thursday, Mar 10, 11 @ 8:30 pm:
–Why would any company want to do business in this state?–
Illinois Named One of Top 10 States for Corporate Locations in National Survey
–Chicago Selected #1 Metropolitan Area in 2010
CHICAGO – The state of Illinois and Chicago today were named among the top 10 locations for new and expanded corporate facilities. Illinois ranked eighth among states and Chicago first in the metropolitan areas category in the annual analysis by Site Selection magazine, one of the nation’s premier corporate real estate and economic development publications.–
Illinois, 5th largest economy among the 50 states, after California, Texas, New York and Florida.
Chicago metro, fourth largest metro economy in the world behind Tokyo, New York, Los Angeles.
Sam, to answer your question…… many.
- Kasich Walker, Jr.'s Consultant on Spiritual Fitness & Sport - Thursday, Mar 10, 11 @ 9:00 pm:
@Jerry 101: Thanks for the link.
It would be fun to know how or if those amounts are audited by the State and/or municipalities.
- Quizzical - Thursday, Mar 10, 11 @ 10:24 pm:
Rich — I agree that Amazon is the bad actor here, but it]s sure not coming across that way in the mainstream media. I too will find another on-line retailer if they go through with this. Their business model and execution are great, but easily replicable; I don’t need them more than they need me.
- Laughing_all_the_way - Friday, Mar 11, 11 @ 12:20 am:
You people have it backwards. Amazon isn’t required to pay a tax; however, you people are required to pay a use tax. If you people paid your use taxes this would not be an issue.