Amazon Tax Passes, Jobs Flee

by Mark Cavers For months, the Institute and others have been warning that passing the Amazon Tax bill would force even more jobs out of our state. Government policies do not take place in a bubble, they have real life impacts. Yesterday Governor Quinn signed the Amazon Tax into law. This effectively cuts off the revenue streams for numerous Illinois based companies that...

by Mark Cavers

For months, the Institute and others have been warning that passing the Amazon Tax bill would force even more jobs out of our state. Government policies do not take place in a bubble, they have real life impacts. Yesterday Governor Quinn signed the Amazon Tax into law. This effectively cuts off the revenue streams for numerous Illinois based companies that maintain a marketing relationship with Amazon, Overstock, and other online retailers as part of their business models, unless they move to another state. Scott Kluth, CEO of CouponCabin.com, put it bluntly,

“It’s a shame we have to consider leaving our longtime home in Illinois, but we will do what is best for our business.” 

The Illinois Policy Institute has a marketing relationship with Amazon. Yesterday, we received this message from Amazon informing us they will be terminating our relationship because of this new law.

Hello,

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.

Regards,
The Amazon Associates Team