Right on schedule.
It got overshadowed by recent events both foreign and domestic, but last week Governor Pat Quinn (D, IL) signed legislation declaring that in-state affiliates for online sellers count as ‘a physical presence’ in Illinois, thus theoretically allowing the state to require those online sellers to collect sales tax information. This is usually called the ‘Amazon tax*,’ as it is largely aimed at Amazon.com
**. This is a long-standing dispute (H/T: Instapundit), and usually ends with the companies in question ending their affiliate programs: Illinois businesses and individuals were however assured (by groups like the Illinois Retail Merchants Association) that there was no chance that Amazon.com would dare end its affiliate program for Illinois***.
Turns out that this was incorrect: as usual in these cases, Amazon.com (and Overstock.com) immediately closed down its affiliate program for Illinois (beginning April 15), thus making the issue moot. This means that no Illinois resident or company will receive a commission for sales – which means lost revenue, which means less taxable revenue for the state of Illinois (Amazon.com requires its affiliates to fill out 1099 forms, and the money that affiliates generate is subject to income tax). It does not mean that Amazon.com itself is forbidden to Illinois: Illinois residents may continue to purchase products from the company – and given its current market share, the lack of affiliate linkage will probably not have any effect on the company’s sales at all. In other words, the state of Illinois has just reduced its annual tax revenue and absolved Amazon.com of the necessity of paying out 4% to 15% commissions on any product indirectly sold on its behalf by a citizen of Illinois.
Brilliant move there, Governor Quinn.
Moe Lane (crosspost)
Continue reading Amazon ended affiliate program in Illinois.
