It’s done. Pat Quinn of Illinois, just signed a bill forcing companies like Amazon and Overstock to collect 6.25% tax on their sales from affiliates, or anyone who has a presence in the state of Illinois. House Bill 3659, the Mainstreet Fairness Bill (of course this doesn’t help Mainstreet, only Springfield) was passed in January and would have become law tomorrow with or without Quinn’s signature.
As a brick and mortar business, I understand why people are fighting for the bill. They are uninformed business owners who are behind the technological times and think this will level the playing field. Of course the state keeps the money that leveled it, not the business owner. The local business is not losing business because of taxes. They’re losing because of economies of scale that the Internet retailers achieve and adding taxes online won’t make that any better.
As for Amazon, I received this tonight, officially ending our business relationship.
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.
The Amazon Associates Team
Although I understand their reasoning, I do think Amazon is using me to prove a point. They have made no effort to reduce commission or work it out. They simply said they can’t afford to keep us Illinois people. Ironically, Wal-Mart, Best Buy, and many others are actively pursuing affiliates and asking them to come over and work for them. Because they’ve always had stores in the area, nothing has changed and their system is already set up for the new law. I never made very much money from Amazon affiliates so it’s no big deal but Mike Cohen and I never got to build that million dollar minisite together. Tear.
On a side note I noticed they sent out the notice with the email firstname.lastname@example.org. Which is ironically the answer to “How many people were making good money in the Amazon affiliate program anyway? “