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Amazon threatens to dump Illinois associates over “unconstitutional” bill, others threaten to leave the state - Tenaska threatens to abandon project

Friday, Jan 7, 2011 - Posted by Rich Miller

* The so-called Amazon Tax also passed the House yesterday

Now, some large Internet retailers such as Amazon.com and Overstock.com don’t collect Illinois sales taxes because they don’t have a physical Illinois presence.

Shoppers technically still owe the taxes, but the vast majority don’t pay because they’re unaware.

The legislation would force Amazon to collect the taxes because they have certain kinds of contracts with Illinois companies. It was approved by a 88-29 vote.

Illinois tax collectors may want to hold off on expecting a large influx of cash immediately, though. In other states that have tried the same move, the laws have been tied up in the courts.

* From yesterday’s House debate

Companies like Amazon allow third-party vendors to sell through its Web site. If Amazon stopped dealing with Illinois businesses to avoid the law, the multi-billion-dollar company wouldn’t be legally bound to pay the tax. That prospect concerns Rep. Dave Winters, R-Shirland.

“A company in my district has a relationship with Amazon. If they move three miles north to Wisconsin, they’re not subject to Illinois law anymore. They could then say ‘you know what, this tax is a great tax but we’re not paying it. We moved out of state, and we’re moving all those jobs with us,’” Winters said.

Having online retailers charge the same tax that brick-and-mortar stores doing business in the state is a matter of fairness, according to Osterman. He said business owners in the state support the measure.

“The business community is squarely behind this. They want to make sure that Illinois businesses are treated fairly and that they are not put at a competitive disadvantage,” Osterman said.

* The bill now heads to the governor’s desk, but Amazon responded quickly yesterday, blasting out an e-mail to Illinois members of its “associates program,” which was forwarded to me last night by several readers…

Greetings from the Amazon Associates Program: We regret to inform you that the Illinois state legislature has passed an unconstitutional tax collection scheme that, if signed by Governor Quinn, would leave Amazon.com little choice but to end its relationships with Illinois-based Associates. You are receiving this email because our records indicate that you are a resident of Illinois…

Please note that this not an immediate termination notice and you are still a valued participant in the Amazon Associates Program. But if the governor signs this bill, we will need to terminate the participation of all Illinois residents in the Associates Program. After that point, we will no longer pay any advertising fees for sales referred to amazon.com, endless.com and smallparts.com nor will we accept new applications for the Associates Program from Illinois residents.

The unfortunate consequences of this legislation on Illinois residents like you were explained to the legislature, including Senate and House leadership, as well as to the governor’s staff.

Over a dozen other states have considered essentially identical legislation but have rejected these proposals largely because of the adverse impact on their states’ residents.

Governor Quinn’s office may be reached here.

We thank you for being part of the Amazon Associates Program, and wish you continued success in the future.

Sincerely,
Amazon.com

…Adding… Uh-oh

Some Illinois-based Web businesses were furious Thursday at a legislative plan that would require online retailers, such as Amazon.com and Overstock.com, to collect a 6.25 percent state tax if they have commissioned affiliates in the state.

That puts at risk huge revenue streams for such Illinois-based Web sites as FatWallet.com, CouponCabin.com and BradsDeals.com, which receive much of their commissions from sending customers to major online retailers. Their commissions are at risk because large retailers have shown in the past that they will sever business relationships with affiliates like those to avoid collecting state sales tax, called a use tax in Illinois, on products they sell. […]

“I feel like I’ve been completely flipped the bird,” said Tim Storm, chief executive of FatWallet, based in Rockton, near Rockford. “Essentially, 30 to 40 percent of our revenue gets shut off instantaneously.”

FatWallet officials were busy Thursday scouting ways to leave Illinois, Storm said.

* And in other business-related legislative news

One week. That’s the most supporters of a clean coal plant that is supposed to be built in Taylorville are willing to give state lawmakers.

Illinois senators voted late Wednesday against state support for what is being billed as a multi-billion dollar, state-of-the-art clean coal power plant and research site. Tenaska Inc. is not asking Illinois lawmakers to pay for the $3.5 billion plant. Instead, the company wants a state guarantee that the electricity generated there will have a market.

Bill Braudt, general manager of business development for Tenaska Inc., said, right now, the company can only sign a three year contract for power. But he insists that no one is willing to finance a multi-billion dollar project based solely on a three year guarantee.

Tenaska has been asking for state help for more than four years, and Braudt said this is the company’s last go-round in Springfield.

“We’ve spent five years trying to develop this project, and $40 million of our own money,” he said. “And if it doesn’t pass this time there is not much confidence that we have that it will be passed later.”

You’ve no doubt seen the arguments on both sides by reading the ads posted here. There are good arguments both for and against this plant, but if we want to stop using old, dirty coal technology then we’ve got to realize that it’s gonna cost more money. There is no magic solution.

* Related…

* Casinos might take a pass on expanding: Under the gambling expansion legislation being considered by lawmakers, existing casinos each would be allowed to add 800 new spots to gamble. But with revenues from their current offerings already dropping and the rights to those spots costing big bucks, existing casinos might take a pass on expanding, an industry representative said Thursday.

* Plants that would turn coal to gas could cost consumers - Illinois bills would force state utilities to purchase synthetic gas from two companies proposing to build plants that produce gas from coal, one downstate and the other on the Southeast Side of Chicago.

* Legislature approves watchdog over transit agencies - State ethics officer could check for fraud, waste

       

44 Comments
  1. - He Makes Ryan Look Like a Saint - Friday, Jan 7, 11 @ 7:33 am:

    With the unemployment rate as high as it is, I cannot believe Illinois would turn down a 2 Billion dollar project that provides over 2000 jobs over the next 5 years and 1000 jobs ongoing.

    What this is about is Excellon does not want the competition so they can continue to raise its rates.

    Coal mining jobs are hard to come by and with the mine they are proposing for Taylorville would provide the needed jobs for already skilled out of work miners.

    What a shame that we are going to lose this opportunity.


  2. - wordslinger - Friday, Jan 7, 11 @ 8:24 am:

    We have loads of coal — as does the rest of the world — and need to advance the technology. It would be smart to have Illinois at the forefront.


  3. - @Home in Kansas - Friday, Jan 7, 11 @ 8:56 am:

    This just reminds me why, even as much as I enjoyed living in Chicago, I returned to Kansas –and it’s 6.6% unemployment rate, low housing costs, and superior climate.


  4. - Francus - Friday, Jan 7, 11 @ 9:23 am:

    They pulled the affiliate sales tax trick here in NC. The internet retailers pulled out and NC now is making less than before due to the loss of income. They were told all this, of course, and many of the affiliates went to VA or SC and they got the tax revenue.


  5. - chuddery - Friday, Jan 7, 11 @ 9:45 am:

    ==This just reminds me why, even as much as I enjoyed living in Chicago, I returned to Kansas==

    Why are there always so many people who come to a site on IL politics to talk about how happy they are that they left?


  6. - Bond_player - Friday, Jan 7, 11 @ 9:52 am:

    Some years ago the head of Amazon said if they were forced into paying/ witholding taxes they would move their operations offshore to a tax haven country. That says it all


  7. - MrJM - Friday, Jan 7, 11 @ 9:53 am:

    chuddery:

    Why are there always so many people who come to a site on IL politics to talk about how happy they are that they left?

    And the funny thing is, I don’t remember noticing that anyone of consequence had left…

    – MrJM


  8. - MrJM - Friday, Jan 7, 11 @ 9:54 am:

    Rich,

    Can you confirm whether or not “Francus” actually posted from NC?

    I’m not sayin’ nuttin’
    I’m just sayin’

    – MrJM


  9. - Loop Lady - Friday, Jan 7, 11 @ 10:00 am:

    Ta-ta and good riddance to Tenaska…this corporate welfare bill does not make any sense for ratepayers who will subsidize this “clean coal technology”…let’s dump one billion into renewable energy such as wind and solar and create incentives for businesses that manufacture these products to locate in IL…


  10. - wordslinger - Friday, Jan 7, 11 @ 10:02 am:

    –Some years ago the head of Amazon said if they were forced into paying/ witholding taxes they would move their operations offshore to a tax haven country. That says it all–

    Brilliant. Then how about this — you can no longer do business in the United States. There are plenty of other outlets to buy the stuff they sell. More business for them.


  11. - Phineas J. Whoopee - Friday, Jan 7, 11 @ 10:11 am:

    State by state income and sales taxes as well a federal income taxes as applied to internet transactions are impossible to enforce or to collect.

    What needs to happen is a nationwide federal internet transaction tax collected by a new sub agency of the IRS. The proceeds could then be distributed to states.


  12. - Fed up - Friday, Jan 7, 11 @ 10:14 am:

    Wow another dem plan that pushes jobs and the revenue they bring in out of Illinois. Hard to say I’m surprised at all.


  13. - Both Sides Now - Friday, Jan 7, 11 @ 10:22 am:

    You got it Wordslinger! The reality is that for a hundred years mail order catalog companies like Sears, Penney’s and Wards received orders from all over the country, collected the taxes and PAID THEM BACK TO THE STATES! You mean to tell me that Amazon with all their technology can’t figure out how to do that?! This will not cost the local affiliates anything but their time to complete appropriate paperwork. The buyer pays the taxes, they go to the seller and the seller pays them back to the state. That’s what every brick and mortar store does. The problem is our shopping habits have changed to make more purchases from the internet sellers who aren’t collecting the taxes and therefore the states are losing out. Amazon may not think Illinois is a business friendly state, but I’m going to bet Illinois just went up a notch in the state’s traditional retailer’s eyes!


  14. - CC - Friday, Jan 7, 11 @ 10:32 am:

    The affiliate tax nexus legislation was pushed through in less than 48 hours, which did not allow Illinois business owners much time to try to inform representatives of just how misguided it is. The effect of the legislation is that many companies (around 200), including Amazon and Overstock will terminate their contracts with local web businesses in order to avoid collecting the tax. Because of that, Illinois will not collect much, if any additional sales tax, while causing a loss of income for the Illinois businesses. That results in less income tax revenue and increased costs to the state through increases in unemployment claims and the inevitable lawsuit that Amazon and Overstock will bring because the legislation in also potentially unconstitutional. That is exactly how it has played out in other states and there is no reason to believe that Illinois will be different.

    A further result is that businesses will seek to leave the state, some of which have a fair number of employees here who will be forced to move or be left unemployed. In my case as a affiliate marketer, much of my income is fortunately derived from companies that will not drop their contracts with me. However, I will lose some income from amazon and was also planning a new project that involved them. That project is now scrapped and I too am exploring my options of incorporating out of state.

    I realize that the state would like to collect its sales tax from companies such as amazon and that brick and mortar companies complain that the disparity isn’t fair, but affiliate nexus legislation simply isn’t the answer. It won’t work, and instead harms state businesses and the state itself.


  15. - cermak_rd - Friday, Jan 7, 11 @ 11:00 am:

    I’m kind of hoping Amazon does cancel its affiliates in IL so I can keep shopping there. I buy a fair amount of stuff on line and I’ve just come to consider that it comes down to I either pay shipping or sales tax. I don’t like to pay both. So if I discover that a given etailer is collecting IL sales tax, I won’t buy there because then I’ll wind up paying shipping and sales tax. Really it’s just a mindset I’ve gotten into as a result of the early days of let’s not strangle the internet revolution mindset.


  16. - timerunningoutfast - Friday, Jan 7, 11 @ 11:03 am:

    It would be great if the individual had the clout to say, “I’m not paying that tax…I’ll just move!” Big businesses can get away with it but the individual would just go to jail. So, we let our wants override our needs.

    Then the big ruckus over High Technology Coal. They make a big noise over the CO2 and everyone forgets about the mercury and other junk that comes out of the same high tech coal plant. We’ve banned mercury from just about everything else…thermometers, school chemistry classes, etc., why then is it alright to let the Coal Companies kill us and our children with the same toxins? That junk either goes into the air or is knocked out of the exhaust into the left over ash. (The Coal Companies sell the polluted ash to cement, wallboard, paving companies, etc., and we get it stuck to us in ways we never saw coming.) It’s all about the money.


  17. - Anonymous - Friday, Jan 7, 11 @ 11:39 am:

    “The reality is that for a hundred years mail order catalog companies like Sears, Penney’s and Wards received orders from all over the country, collected the taxes and PAID THEM BACK TO THE STATES! You mean to tell me that Amazon with all their technology can’t figure out how to do that?!”
    All those stores you mention had (some ‘have’– but mostly ‘had’) physical infrastructure in the state. So, they benefitted from local transit, roadways, water & sewer, police protection, etc. Amazon and Overstock gain absolutely no services from the state. Why should they help Illinois steal from its citizens? Keep collections at the citizen level as they are now. Cost of compliance and tax avoidance is the state’s problem, not the online retailers’.


  18. - vole - Friday, Jan 7, 11 @ 11:44 am:

    Time for the US Congress to step in and require all web sales companies to collect state sales taxes.

    From my understanding, internet sites have been given a free pass on collecting sales taxes to help promote web start ups and the growth of this segment of the economy. It has far surpassed the time that this exemption be granted.

    Amazon is playing a tyrannical hand here. I am going to be looking for alternatives in the future.


  19. - zatoichi - Friday, Jan 7, 11 @ 11:48 am:

    “I’m not paying that tax…I’ll just move!” makes a nice sound bite, but how many times can a company move? Shirland has that company that would move to Wisconsin. When Wisconsin puts in a similar law where do they then move to avoid the tax.

    If this makes brick and mortar stores a little more equal, does that mean if may give real bookstores a competitive chance against Amazon?


  20. - VanillaMan - Friday, Jan 7, 11 @ 11:51 am:

    Thanks Anonymous.
    You are right.
    The Supreme Court has ruled twice that taxing businesses without physical presence within the taxing state is a violation and burden as described by the Commerce Clause.

    This is not a new issue.

    The catalog retailers did NOT collect taxes on orders from states or countries where they did not have a physical presence.

    The Amazon tax is stupid.


  21. - Small Town Liberal - Friday, Jan 7, 11 @ 11:53 am:

    - Amazon and Overstock gain absolutely no services from the state. -

    Except for the major investment in broadband infrastructure the state is making, of course. But hey, don’t let facts get in your way.


  22. - Dave Lundy - Friday, Jan 7, 11 @ 11:59 am:

    “Let’s dump one billion into renewable energy such as wind and solar and create incentives for businesses that manufacture these products to locate in IL.”

    Sorry, but as much as I love and am a big supporter of renewables, they are intermittent power sources - meaning they run whenever the wind blows or the sun shines. Their power cannot be stored which means you still need fossil fuel facilities (or nukes) as baseload power. We’re about to lose almost 1/2 our coal plants. We need clean alternatives like the Taylorville Energy Center.

    “They make a big noise over the CO2 and everyone forgets about the mercury and other junk that comes out of the same high tech coal plant.”

    Actually, if this is your concern, you should be a big supporter of the Taylorville project as its gasification technology removes more than 99% of mercury and well over 95% of other conventional pollutants. That’s the point of this plant. And because of its low variable cost to run, it will displace much higher emitting plants from being run. The net effect is an annual reduction of 2 million tons of CO2 and 11,600 tons of sulfur dioxide and NOX.

    Oh, and it uses Illinois coal, puts thousands to work and is supported by all the state’s leading consumer advocates - CUB, the Illinois Power Agency, AG Madigan. It’s a great project whose time has come.


  23. - JN - Friday, Jan 7, 11 @ 12:02 pm:

    “The Supreme Court has ruled twice that taxing businesses without physical presence within the taxing state is a violation and burden as described by the Commerce Clause.”

    Sales Tax is charged to the consumer, not the business. The question is whether or not businesses are required to collect the the tax on behalf of the state.

    Also, a hundred-year loophole is still a loophole.


  24. - VanillaMan - Friday, Jan 7, 11 @ 12:04 pm:

    Dont let the facts get in the way when we are discussing reality.

    The SC has already ruled.

    The Amazon tax is clearly unconstitutional. Those are both the facts and the reality the GA has chosen to ignore.

    Before legislation is passed it should be reviewed to determine its constitutionality. It is not the SC job to clean up unconstitutional law. You dont break the law and just wait for the courts to catch you.

    Dont pass unconstitutional bills.


  25. - VanillaMan - Friday, Jan 7, 11 @ 12:16 pm:

    It is not a loophole.
    It is the recognition that a state cannot place an undue burden onto a business not operating within that state. Why should you expect any business to be able to?

    If you get an order from New Cleveland why should you be forced to understand business laws and taxation in New Cleveland? Just to send the purchaser a pack of razors?

    That is clearly NUTS!

    The SC set the law on this question generations ago. The fact that Illinois is bankrupt and desperate does not over ride these constitutional laws.


  26. - wordslinger - Friday, Jan 7, 11 @ 12:18 pm:

    –It is not the SC job to clean up unconstitutional law–

    LOL, that would be news to Justice Marshall — I mean John, but Thurgood, too. See Marbury v. Madison and Doctrine of Judicial Review.


  27. - Ghost - Friday, Jan 7, 11 @ 12:19 pm:

    VAMAN I hate to burst your bubble, but presence in a state is not dependent on having a physical building. It can leally be establised by contractual relationhips where the contracts are signed and entered into in the State.


  28. - Ghost - Friday, Jan 7, 11 @ 12:26 pm:

    The use tax in IL i supposed to be paid on all purchases in the State. We want to lure local business and keep it here, we need to make sure those with a physical presence in the State can be competitive with an out of State business. Anyone who has ever said we need to act to keep buisness in IL should be in support of this.

    Also we are collecting an exisiting tax from folks who have not been paying it, so it adds revenue without increasing taxes etc.

    Amazon already collects State sales tax if you buy from an IL affiliate, all they have to do is flip a switch to add the ollection to their other IL sales.

    I am not sure why anyone would want to send large dollar purchases out of State and encourage business to leave IL. The real issue here is should we have a use/sales tax. If the answer isno, then we need amuch heftier income tax. if the answer is yes, then we need to apply it failry an uniformly so that we are not encouraging buisness t occur outside the State.


  29. - JN - Friday, Jan 7, 11 @ 12:31 pm:

    Ghost++


  30. - Loop Lady - Friday, Jan 7, 11 @ 12:40 pm:

    Mr. Lundy, AG Madigan is NOT in favor of the bill as you state so eloquently. Try again…
    The campaign of misinformation by the proponents
    continues.
    Who do you work for anyways? There is already enough baseload in the state, another misstatement (or if you prefer, lie)being promulgated in this battle.
    I am relatively sure that whatever monies spent on this campaign of misinformation and corporate greed by Tenaska will more than be recouped over thirty years of price gouging by commercial and residential users alike.

    Someone has the welfare of regular IL folks in their best interests in this war of words, but it sure as hell aint Tenaska…


  31. - VanillaMan - Friday, Jan 7, 11 @ 12:45 pm:

    After a president signs a bill into law, it does not go to the SC for review. It is NOT the job of the SC to clean up unconstitutional laws. Marbury comes years after 1789. You are wrong.

    As to the rest of you, you do not understand that it is the Commerce Clause that regulates these things. The SC has already determined that expecting a business to be able to fully understand and implement the laws and taxation within a state or country based on an addressees residence is an undue burden.

    Geez! Think about it. Of course it is.

    Case closed. Stop focusing on your supposed collections.


  32. - wordslinger - Friday, Jan 7, 11 @ 12:50 pm:

    You miss many points, VMan, but that’s okay.

    But a law is a law until it’s repealed or ruled unconstitutional.


  33. - VanillaMan - Friday, Jan 7, 11 @ 12:54 pm:

    In your dream world Ghost.

    You are telling little start ups that they will be required to have a system in place that would handle any sales taxes coming from any place. That is going to shut the little start ups down.

    Or do you know what the taxes are on that order of balloons going to New Hampshire and Delaware? How about West Virginia?

    The SC ruling determined that it is reasonable for a business to know the laws and taxes in states where they operate, but it is an undue burden as defined in the constitution to know Everything.


  34. - VanillaMan - Friday, Jan 7, 11 @ 1:04 pm:

    In your world wordslinger a legislative body can knowingly pass unconstitutional laws and just wait for the SC to catch up to it sometime in the future.

    It is the responsibility of the legislature to pass laws recognized as constitutional.

    This is clearly a bankrupt government passing laws in hope that they can get away with the heist. Pitiful.

    And the Congress read through our constitution yesterday. You know, the one they just swore to uphold? Your interpretation of the SC seemed to have been AWOL.


  35. - Going nuclear - Friday, Jan 7, 11 @ 1:05 pm:

    I was not a big fan of the Tenaska coal gasification project, but it seems unfair the GA signed off on legislation supporting the two coal-to-gas plants. These two “white elephant” projects clearly can’t survive in the marketplace without government intervention. Why treat them differently?

    It’s probably time to end all government subsidies for energy production, including oil, coal, gas, nuclear, ethanol, and even for wind and solar. I think energy subsidies end up being an impediment to rationally dealing with long-term energy challenges, and haven’t done much to lead our country towards energy independence and cleaner and more cost-efficient energy resources.


  36. - Small Town Liberal - Friday, Jan 7, 11 @ 1:06 pm:

    - It is the responsibility of the legislature to pass laws recognized as constitutional. -

    That would kind of defeat the purpose of the Supreme Court. Are you saying laws deemed constitutional or unconstitutional can’t have that decision changed? I guess all of the abortion opponents should pack it up and head home if that’s the case.


  37. - wordslinger - Friday, Jan 7, 11 @ 1:10 pm:

    VMan, you’re always good for a few laughs, I’ll give you that. Did you read along yesterday with the Chunky Book version.


  38. - VanillaMan - Friday, Jan 7, 11 @ 1:12 pm:

    I have to go.
    Have at it.

    Sorry that law is unconstitutional. Sorry the GA is spinning its wheels looking for more golden eggs from Big Mean Business! Sorry they are shutting down little start ups benefitting from online commerce.

    Sheesh they are morons sometimes.


  39. - Dave Lundy - Friday, Jan 7, 11 @ 1:12 pm:

    “Mr. Lundy, AG Madigan is NOT in favor of the bill as you state so eloquently. Try again…”"

    Loop Lady, I don’t know where you are getting your information, but as someone who has worked side by side with senior staff from AG Madigan’s office for months on this legislation, I can assure you that you are very, very wrong.

    As to the baseload question, I suggest you direct your inquiry to the Illinois Power Agency or the myriad independent analysts who have studied the issue and concluded otherwise. Independent analysts and authorities agree we need to replace the 40-50% of dirty coal capacity that is retiring. Representatives from Exelon (including the STOP Coalition which is largely funded by Exelon/ComEd) which stands to make hundreds of millions more a year would have you believe otherwise. They are not an independent source.


  40. - Dave Lundy - Friday, Jan 7, 11 @ 1:15 pm:

    And I’ll throw this in from today’s SJR editorial:

    “So why did the Chicago plant win approval while Tenaska (apparently) was killed? The Capitol Fax newsletter provided the most succinct explanation: “The Chicago plant will produce synthetic natural gas to be burned in homes, so Exelon and ComEd didn’t care about it.” Without an army of lobbyists spreading tales of terror, senators saw the gasification plant as a much-needed economic opportunity for an economically depressed area.

    As the minutes wind down in the current legislative session, we will keep a tiny ember of hope glowing that cooler heads will prevail and Tenaska will get another vote — with a different result — in the Senate. We fear, however, that this will become another example of economic opportunity lost to the power of clout.”


  41. - steve schnorf - Friday, Jan 7, 11 @ 1:49 pm:

    To tell you the truth I’ve never bought legal opinions thru Amazon so I’m not in a position to judge the quality of legal work they sell over the net. I think I’ll let someone other than them determine whether the law is unconstitutional or not.


  42. - Both Sides Now - Friday, Jan 7, 11 @ 3:13 pm:

    Last time I knew, Amazon was not “a little start-up”. They may have Associates that are small but it is Amazon that is collecting the money. Having once had a business from home that was associated with a big corporation, I had to pay my sales tax to the big corporation based on the retail value of what I purchased. Then I charged my customers that same tax. That’s how they did it. It can be done, it’s just that Amazon and other big internet companies don’t want their bubble burst.

    And whether or not they have a physical presence here, the purchasers do, and if those purchasers want the streets, schools, and services provided by the state, then they have to pay taxes on what they purchase, whether it be in a brick and mortar or online store. Because they haven’t been, Illinois is losing millions of dollars in revenue each year.


  43. - Why Lose 9000 Incomes - Monday, Jan 10, 11 @ 3:10 pm:

    A plea to
    The Honorable Patrick Quinn, Governor

    On an affiliate forum site it states that Illinois has 9000 affiliate marketers.

    Why would you want to lose 9000 badly needed incomes? If Boeing or Caterpillar had 9000 jobs in Illinois being affected by this tax you can bet there isn’t a legislator that would have dreamed of presenting it.

    It’s not that Amazon and other big affiliates companies that have associates in Illinois can’t track and possibly gather tax money. It’s not whether they should or not.

    It’s they don’t want to and won’t. These companies will just terminate 9000 associates as they have in the three states that have passed this type of tax law. With the states having lost revenue as a result.

    Their businesses will have a small blip in revenue loss but easy to survive and go on. The 9000 associates - they may or may not survive. If they do they will have less income to report for the new income tax increase.

    If the larger ones that have employees move out of the state as they have stated they must do to survive. The state will lose their income tax + the sales tax of these families spending their money to live in Illinois + any lost employees will be on unemployment + lost office rentals + lost property taxes. It doesn’t seem logical to create a tax that will not generate income and will hurt 9000 families plus the state.

    The Downside -
    This tax will not generate income because the companies will not collect it. It will ultimately cost Illinois badly needed tax income.

    It will stop anyone from starting this kind of business in Illinois in the future. Hurting future tax generation.

    According to the Tax Foundation Illinois tax payers pay about $4346.00 per capita in yearly sales taxes. Let’s look sales taxes if you had the worst case that all 9000 were total Illinois job & income losses and there was an average of three people in every family.
    4346 X 3 people = $13,038 in taxes
    13,038 x 9000 families = $117,342,000 in lost sales taxes
    Even if half became true losses.
    It would mean a loss of $58,671,000.00 in sales taxes with no increase. If only a third it would be $39,114,000.00. Add in lost income and property taxes and it’s a loss Illinois can’t afford.

    The Only Upside -
    The Illinois Government looks good to the uneducated public because it looks like it’s doing a good thing. When really they are hurting the state with an eventual large loss of tax income.

    If only Illinois would help these small businesses thrive and increase their income instead of hurt them. They would be glad to pay their fair share of added income tax at the higher rates now being talked about. Plus they would have more income to spend generating more sales taxes.

    It’s tough to ask these 9000 voters to pay an increased income tax when you take away the ability to pay it.

    It has been stated that small businesses are the back bone of commerce. Please make it more hospitable to do business in Illinois for these people so more of them will continue in Illinois and more would want to start a business here.

    Governor - Please VETO Senate Amendment 3 of HB 3659 (see Line 22 through 25, Sec. 1.1 on page 9.


  44. - Carolyn - Wednesday, Jan 12, 11 @ 5:11 pm:

    I’m an Amazon affiliate and a resident of Illinois. The speed at which the affiliate nexus language was added to this bill and then it was passed is absolutely shocking. There has been no time to affiliates to present our side of the story.

    Yes, this will destroy my business as Amazon will terminate me — and all the other Illinois affiliates — rather than collect the tax. So the state won’t get the sales tax, NOR will it get the income tax I’d pay on my income.

    It’s a lose, lose for the state . . . and all of us entrepreneurs. And for all the local businesses who will lose out on my business, as I’ll no longer have income to spend with them. And the ripples will continue

    This needs to be vetoed by the Governor.


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