The Amazon Tax

It seems the State of Illinois is so desperate for revenue that it is instituting an internet sales tax.

CHICAGO, Jan. 7, 2011 /PRNewswire/ -- The Internet Tax Bill (HB 3659) was passed in the Illinois Senate on January 5, by the House of Representatives on January 6 and brought to the Governor, who may sign it into a law as early as Friday, January 7.

The tax legislation relates to out-of-state merchants like Amazon.com and Overstock.com that do not have a physical presence in Illinois but have relationships with Illinois advertisers and publishers like CouponCabin.com. By this law, these merchants are deemed to have a presence (nexus) in Illinois and are therefore required to collect Illinois sales tax.

The goal of this is to increase tax revenue for the state, but what has happened in the four states that have passed similar laws (New York, Colorado, North Carolina and Rhode Island) is that instead of collecting sales tax, these merchants have severed their relationships with publishers in that state. Twelve other states have rejected similar legislation.

In response to this Amazon sent me the following e-mail:

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. If our records are incorrect, you can manage the details of your Associates account here .

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

Here is the note I sent to the governors office:

Veto the bill.

I'm retired on Social Security and make a few dollars a month selling Amazon products. This is very helpful as I have a disabled son I have to take care of. This action on the part of the legislature is going to hurt my family greatly. You have no idea what an extra $20 or $30 a month means to my family.

If you would like to help out before the State of Illinois closes the window on my fingers order something from Amazon using this link:

Amazon.

I think the State of Illinois is doing its best to strangle business in the State. Once upon a time we had a fairly reasonable Republican government in this state. Until George Ryan ruined it for Republicans. The crook. Now all we get are anti-business Democrats. At least the Republicans had some idea that the goodies they were passing out had some connection to the productive economy. At least the Republicans before Ryan. It is Illinois after all.

Update: A nice link filled post on the subject from Backyard Conservative.

Cross Posted at Classical Values