Apr
16
2011

#rsrh Amazon tax in Illinois ends predictably.

Amazon.com canceled its affiliate program in Illinois.  Overstock.com will be doing so on May 1st.  Zappos and Shoes.com are in the process of doing the same.  Companies that rely on this affiliate program are planning to relocate out of Illinois and somewhere (Wisconsin says hi!) that doesn’t have an Amazon tax.  All of this is hardly news: Illinois legislators had this explained to them from the start.  They just ignored it, not least because they’re actively courting some of the big-box brick-and-mortar retailers (who are currently having their milkshakes drunk by online retailers).

And note well: none of this will affect the average consumer’s ability to buy stuff from Amazon.com, or any of the other large Internet-based retailers.  It merely shuts off state revenue in the form of income tax that Illinois was earlier and effortlessly gathering from in-state retailers.  Revenue that will not be made up for by taxing any mild sales increases for, say, Wal-Mart.

Moe Lane

PS: Background on the underlying issue can be found here: suffice it to say that Democrats can demonstrate a remarkable ability to ignore basic reality.  In this case, what they’re ignoring is that an affiliate program for Amazon.com and other big online retailers is profitable, but not essential.  As the Democrat-controlled state government of Arkansas is about to discover, in fact.

PPS: Usual full disclosure: I am an Amazon.com affiliate for Maryland.

PPPS: And do you know what the really ironic bit is?  Thanks to Amazon.com, people probably buy more items from local used bookstores now than they did before the company existed, because the company acts as a clearinghouse for available obscure and out of print items.  Ach, irony.

1 Comment

  • Don says:

    How is it that democrats willfully use the tax code with the goal of changing behavior (raising cig taxes to promote a healthier lifestyle for example) yet turn around and be shocked when things like this inevitably occur?

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