Attention: Soon Illinois Residents Will Be Booted Out Of The Amazon Affiliate Program!

by jwardz 73 replies
I received an email from Amazon Associates stating they will be terminating my participation in the Amazon Associates program as soon as the Governor of Illinois signs a new tax bill (that was passed by the legislature). I live in Illinois. The tax bill affects anyone selling products on the Internet. Anyone who purchases goods from a seller who lives in Illinois will have to pay Illinois sales tax. This is essence puts us out of business. Why would anyone want to pay an extra 6.25% when they could go to someone else who lives in another state and pay no sales tax on the same product. Other states are also considering this law. I started doing IM and have 7 sites and all will be affected by this law. 5 of my sites are Amazon Affiliate sites, 1 is an Amazon store selling text books (brings in good money) and 1 is a bird toy store selling products and has a few affiliate links. I am trying to stay calm. Below is the email I received from Amazon:

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,
#main internet marketing discussion forum #affiliate #amazon #attention #booted #illinois #program #residents
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  • Profile picture of the author jwardz
    I forgot to mention I also just finished a clickbank affiliate site. I don't think that will be affected, but it isn't bringing in money yet because it is brand new and I am working on SEO. I am sure that Illinois politicians will be able to tap into in the near future.
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  • Profile picture of the author JennSpencerIM
    Wow I'd honestly consider moving if it was bringing me in enough money. I used to live in NC and couldn't use Amazon Affiliates. Now that I'm in CA I'm not sure if I can. But man that would stink...I just hate when they changes the laws to limit small businesses.
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  • Profile picture of the author JennSpencerIM
    Opps check this thread: http://www.warriorforum.com/main-int...residents.html

    Guess you could talk to someone about setting up an LLC elsewhere....
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    • Profile picture of the author mott
      I got this email too. The "Amazon Tax" law, as they are calling it now, would also affect Overstock and other online retailers. I guess we all have to move.
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      • Profile picture of the author russells
        I feel so aweful for those affected by this new bill. It's quite worrying to think about the future of affiliate marketing and selling on the web in general.

        I mean, eventually will every state pass this law? Will all affiliate networks (including clickbank etc) be in the same situation? Even though I live in the UK I am still potentially affected by these as Clickbank etc are US companies.

        I don't know, that's why I'm asking. I don't mean to be negative.

        I can't think of anything more depressing than being in a J.O.B for the rest of my life.

        ~Russ
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        • Profile picture of the author mott
          This is so lose-lose. Even though they don't know it, Illinois will lose revenue if this bill is passed. Say an Illinois resident makes $100,000 a year in Amazon commisions. They pay state tax on those earnings. Once this bill goes through, that revenue is gone, which means the state tax is gone.

          So Illinois loses, the resident loses, and Amazon loses. Who wins?
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          • Profile picture of the author Michael Oksa
            Originally Posted by mott View Post

            This is so lose-lose. Even though they don't know it, Illinois will lose revenue if this bill is passed. Say an Illinois resident makes $100,000 a year in Amazon commisions. They pay state tax on those earnings. Once this bill goes through, that revenue is gone, which means the state tax is gone.

            So Illinois loses, the resident loses, and Amazon loses. Who wins?
            The people who don't live in states with such laws.

            However, I have a sneaking suspicion that more and more states will adopt such laws. While I am against raising taxes, I also wonder why Amazon and other big retailers can't deal with such changes in the law.

            This may sound naive, but how hard is it to program their site to allow for this? Especially considering they must already have some serious programmers on staff.

            All the best,
            Michael
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            • Profile picture of the author mott
              Originally Posted by Michael Oksa View Post

              The people who don't live in states with such laws.

              However, I have a sneaking suspicion that more and more states will adopt such laws. While I am against raising taxes, I also wonder why Amazon and other big retailers can't deal with such changes in the law.

              This may sound naive, but how hard is it to program their site to allow for this? Especially considering they must already have some serious programmers on staff.

              All the best,
              Michael
              I'm probably missing something myself, but even if Amazon did reprogram their site to allow taking the sales tax, who would pay it? If I knew I was paying 6% sales tax from one affiliate, and 0% tax not using the affiliate, then I would like to save the 6%.

              And you are right, other states would gain, and the people living in them. The guy making $100,000 in commission will move to Wisconsin.
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              • Profile picture of the author Michael Oksa
                Originally Posted by mott View Post

                I'm probably missing something myself, but even if Amazon did reprogram their site to allow taking the sales tax, who would pay it? If I knew I was paying 6% sales tax from one affiliate, and 0% tax not using the affiliate, then I would like to save the 6%.

                And you are right, other states would gain, and the people living in them. The guy making $100,000 in commission will move to Wisconsin.
                That's right. Doesn't sound like you're missing anything at all.

                The only thing I can think of in regards to your example is that not all buyers online would know that they COULD try another affiliate. In other words, they may just accept it and pay the tax.

                That being said, I do think a lot of other states will be adopting such laws in the next few years. So, it would be in Amazon's (and other companies) best interest to be ready to handle. Because at some point, Amazon will be the ones losing money.

                And, let's be real, the common affiliate is NOT going to move to another state just so they can sell affiliate products. However, some will move, especially those who make a majority of their income in that way.

                There will be a tipping point for a lot of these issues. I don't know what that is, or what the effect will be, but it will be interesting.

                All the best,
                Michael
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                • Profile picture of the author Dave Rodman
                  Banned
                  Originally Posted by Michael Oksa View Post

                  That's right. Doesn't sound like you're missing anything at all.

                  The only thing I can think of in regards to your example is that not all buyers online would know that they COULD try another affiliate. In other words, they may just accept it and pay the tax.

                  That being said, I do think a lot of other states will be adopting such laws in the next few years. So, it would be in Amazon's (and other companies) best interest to be ready to handle. Because at some point, Amazon will be the ones losing money.

                  And, let's be real, the common affiliate is NOT going to move to another state just so they can sell affiliate products. However, some will move, especially those who make a majority of their income in that way.

                  There will be a tipping point for a lot of these issues. I don't know what that is, or what the effect will be, but it will be interesting.

                  All the best,
                  Michael
                  I think you guys are missing the point of this law. It's not to collect income on sales made by affiliates based in Illinois. It's to collect sales tax on ALL sales made to Illinois residents. The affiliates are the justification for the law. If Amazon has affiliates in the state, they have a presence. And if they have a presence, then we can tax purchases to residents of Illinois.

                  That's why they are going through the drastic measure of cutting the affiliate program all together. Even though they are losing revenue from what affiliates drive, it's NOWHERE near the impact of having to tack on tax on every IL purchase.
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                  • Profile picture of the author mott
                    Originally Posted by Dave Rodman View Post

                    I think you guys are missing the point of this law. It's not to collect income on sales made by affiliates based in Illinois. It's to collect sales tax on ALL sales made to Illinois residents. The affiliates are the justification for the law. If Amazon has affiliates in the state, they have a presence. And if they have a presence, then we can tax purchases to residents of Illinois.

                    That's why they are going through the drastic measure of cutting the affiliate program all together. Even though they are losing revenue from what affiliates drive, it's NOWHERE near the impact of having to tack on tax on every IL purchase.
                    Actually, the tax is for sales made in Illinois to anyone, wherever they reside. I can be from Timbuktu and if I am in an Illinois store, I have to pay sales tax on a purchase. And if I am an Amazon affiliate from Illinois, then someone from Timbuktu purchasing from me has to pay the tax too. That's why the law is stupid.
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                    • Profile picture of the author doylesoft
                      Somehow it doesn't affect Clickbank... far as I know. CB collects tax in New York, Colorado, and other states automatically and submits those taxes to the State... just like they would for EU tax.

                      Frankly, I think Amazon is right, I think Amazon is only legally obligated to collect sales tax if the buyer lives in Illinois. Who gives a flying leap if the affiliate is in Illinois?! Amazon already collected and paid sales tax on the sale in the first place!

                      Now if the law was written to target affiliates residing in the State too, that's just harsh. Sounds like nasty double-dipping to me.
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                    • Profile picture of the author Dave Rodman
                      Banned
                      Originally Posted by mott View Post

                      Actually, the tax is for sales made in Illinois to anyone, wherever they reside. I can be from Timbuktu and if I am in an Illinois store, I have to pay sales tax on a purchase. And if I am an Amazon affiliate from Illinois, then someone from Timbuktu purchasing from me has to pay the tax too. That's why the law is stupid.
                      I don't think that's true. Because if it was, then you'd be hearing more noise from web-based companies in IL. They'd all the sudden have to start charging sales tax on purchases made in NV? I don't think that's right.
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                      • Profile picture of the author mott
                        Originally Posted by Dave Rodman View Post

                        I don't think that's true. Because if it was, then you'd be hearing more noise from web-based companies in IL. They'd all the sudden have to start charging sales tax on purchases made in NV? I don't think that's right.
                        We ARE hearing noise from web-based companies in Illinois!
                        Internet Tax: Good for Drained State Coffers or Bad for Business? | Fast Company

                        That's exactly what Illinois-residing businesses are saying; they would have to charge sales tax for anything they sell over the Internet to anybody. Not just to Illinois residents.

                        Amazon is still going to sell to Illinois residents; they just don't want a "residence" in Illinois when they do it, so they don't need to worry about this tax. But that tax would apply to ANYONE ANYWHERE who purchases from an Illinois affiliate.
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                        • Profile picture of the author Dave Rodman
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                          Originally Posted by mott View Post

                          We ARE hearing noise from web-based companies in Illinois!
                          Internet Tax: Good for Drained State Coffers or Bad for Business? | Fast Company

                          That's exactly what Illinois-residing businesses are saying; they would have to charge sales tax for anything they sell over the Internet to anybody. Not just to Illinois residents.

                          Amazon is still going to sell to Illinois residents; they just don't want a "residence" in Illinois when they do it, so they don't need to worry about this tax. But that tax would apply to ANYONE ANYWHERE who purchases from an Illinois affiliate.
                          I don't think you're reading that article correctly. This is a tax on IL residents. If you operate a web business and sell to an IL resident, you collect sales tax. Nothing about that will change. Illinois has a "use tax" which means they SHOULD be paying taxes on purchases made out of state...but nobody does. So this law would require merchants, who have affiliates in IL, to collect sales tax.
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                          • Profile picture of the author mott
                            Originally Posted by Dave Rodman View Post

                            I don't think you're reading that article correctly. This is a tax on IL residents. If you operate a web business and sell to an IL resident, you collect sales tax. Nothing about that will change. Illinois has a "use tax" which means they SHOULD be paying taxes on purchases made out of state...but nobody does. So this law would require merchants, who have affiliates in IL, to collect sales tax.
                            OK I see what you are saying, thanks. It's all very confusing. All I know is, it's a stupid law if it passes.
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                    • Profile picture of the author CDarklock
                      Originally Posted by mott View Post

                      Actually, the tax is for sales made in Illinois to anyone, wherever they reside.
                      There are three ways to look at this.

                      The way Illinois sees it, if you have a brick and mortar storefront in Illinois, then anyone who walks into your store - no matter where they're from - has to pay sales tax on whatever they buy.

                      But the way Amazon sees it, an affiliate in Illinois is not a storefront. So they don't need to collect sales tax from Illinois residents.

                      Did anyone here ever sell Olympic greeting cards? The stuff advertised in the back of comics?


                      Here's how that worked.

                      You would walk around from door to door selling people greeting cards. They would write you checks. You would send those checks to Olympic. And Olympic would send them the cards they ordered. Every order you placed earned you points. And after you had enough points, you could get a prize.

                      Now, here's the critical point. When you collected the money, the ONLY people who paid sales tax were the people in the states where Olympic had a corporate office or shipping facility.

                      This is precisely the way things work for Amazon today, and it's the way things have worked pretty much forever. But five states now have decided they want things to work differently. They have decided that customers in their state have to pay sales tax, too, and that Olympic/Amazon need to collect that sales tax and send it in.

                      So Amazon is taking a stand on the matter and saying "well, we just won't let people in your state sell for us, and how do you like that?"

                      And the states simply don't grasp the problem.
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            • Profile picture of the author wazzer
              How about the States do something kind of crazy like creating jobs instead of dipping into the pockets they have no right to. I live in Cook county which last I heard has highest sales tax in the country. Between income, property, transportation, gas and sales tax, you're lucky if you get .050 out of every dollar earned.

              Mike
              PS. Illinois residents should contact Quinn and let him know how you feel.
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            • Profile picture of the author tj
              Originally Posted by Michael Oksa View Post

              The people who don't live in states with such laws.

              However, I have a sneaking suspicion that more and more states will adopt such laws. While I am against raising taxes, I also wonder why Amazon and other big retailers can't deal with such changes in the law.

              This may sound naive, but how hard is it to program their site to allow for this? Especially considering they must already have some serious programmers on staff.

              All the best,
              Michael
              It has only indirectly something with such laws / changes in laws. Amazon as like any profit oriented company does not want to lose a percentage of their profit. If they can prevent paying a tax they will do it no matter what.

              Timo
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              • Profile picture of the author SteveJohnson
                Originally Posted by tj View Post

                It has only indirectly something with such laws / changes in laws. Amazon as like any profit oriented company does not want to lose a percentage of their profit. If they can prevent paying a tax they will do it no matter what.

                Timo
                This isn't a tax on Amazon - it's a sales tax, the customer pays it and Amazon just collects it.
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        • Profile picture of the author Dave Rodman
          Banned
          Originally Posted by russells View Post

          I feel so aweful for those affected by this new bill. It's quite worrying to think about the future of affiliate marketing and selling on the web in general.

          I mean, eventually will every state pass this law? Will all affiliate networks (including clickbank etc) be in the same situation? Even though I live in the UK I am still potentially affected by these as Clickbank etc are US companies.

          I don't know, that's why I'm asking. I don't mean to be negative.

          I can't think of anything more depressing than being in a J.O.B for the rest of my life.

          ~Russ
          If every state passed this law, then they would reinstate the affiliate program because they can't get around paying tax.

          But every state WON'T pass this tax. You'll have more conservative states that will reject this. And they'll probably have a lot more inflows of citizens...not necessarily because of this, but because they tend to be lower tax states.
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    • Profile picture of the author bobsstuff
      Originally Posted by JennSpencerIM View Post

      1-potential-illinois-tax-law-end-amazon-associates-program-illinois-residents.html

      Guess you could talk to someone about setting up an LLC elsewhere....
      This was my thought also. Incorporate in a Nevada or Delaware.
      Research it. There are legitimate companies who will help and there are scammers who will tack on all kinds of fees.

      OR, move. IM is a very portable business.
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      • i was thinking the same thing. i believe if you use legalzoom.com, they are based out of Maryland. I know many people from California do this because of the states ridiculous tax laws when it comes to corporations.
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        • Profile picture of the author Dave Rodman
          Banned
          There was a discussion in the other thread about this issue. A lot of people said that it wouldn't work.

          But, I think it would in this case. Most people are not trying to avoid paying taxes. They just want to be accepted into the Amazon affiliate program. So if you setup a corporation in NV and get accepted as an Affiliate, then you're set.

          You'd run into a problem if you all the sudden didn't pay taxes on income earned through that corporation. Then it'd be fairly simple for any state taxing agency to prove that your base of operation is in IL.

          As long as you pay tax on the income you earned from your NV corporation, then what can IL really do to you? It's not your fault that amazon didn't collect tax.
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      • Profile picture of the author tj
        Originally Posted by bobsstuff View Post

        This was my thought also. Incorporate in a Nevada or Delaware.
        Research it. There are legitimate companies who will help and there are scammers who will tack on all kinds of fees.

        OR, move. IM is a very portable business.
        Moving will help you only so much once a national VAT will be established.

        Timo
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  • Profile picture of the author jwardz
    Here is more. I can't believe what they are doing here in Illinois. I won't be staying too long if this goes through. We won't be able to conduct any business and make a profit:

    “The taxpayer: That’s someone who works for the government but doesn’t have to take the civil service examination.” – Ronald Reagan.

    Do Illinois Democrats hate the private sector? Yesterday, they put their cards on the table. They want to hike our taxes by 75%- a NEAR DOUBLING of the income tax! They will increase the corporate tax rate to 10.9% the second highest in the country! On top of all this, they plan to increase spending and borrow up to $20 Billion more!

    Call your state representatives. Look up their name and phone number.
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    • Profile picture of the author Rob Howard
      Originally Posted by jwardz View Post

      Do Illinois Democrats hate the private sector? Yesterday, they put their cards on the table. They want to hike our taxes by 75%- a NEAR DOUBLING of the income tax! They will increase the corporate tax rate to 10.9% the second highest in the country! On top of all this, they plan to increase spending and borrow up to $20 Billion more!

      Call your state representatives. Look up their name and phone number.
      Are you serious?

      Welp - there goes my amazon commissions.

      Good heavens. These last 3 months have been atrocious.

      So, since I'm selling my own digital products, that means that I have to start collecting sales tax on my customers now have to pay dear ol' Illinois?
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      • Profile picture of the author Dave Rodman
        Banned
        Originally Posted by ccmusicman View Post


        So, since I'm selling my own digital products, that means that I have to start collecting sales tax on my customers now have to pay dear ol' Illinois?
        If you're in IL, then you'd already be collecting tax for sales to IL residents.

        You don't have to collect tax for sales to residents in other states.
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        • Profile picture of the author Rob Howard
          Originally Posted by Dave Rodman View Post

          If you're in IL, then you'd already be collecting tax for sales to IL residents.

          You don't have to collect tax for sales to residents in other states.
          I know that, I'm talking about this new law, I would basically have to collect sales tax on everyone?
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          • Profile picture of the author Dave Rodman
            Banned
            Originally Posted by ccmusicman View Post

            I know that, I'm talking about this new law, I would basically have to collect sales tax on everyone?
            No, you wouldn't collect it on everyone. You're unaffected as a business owner. It only affects out of state companies with affiliates in the state. They are looking make the case that Amazon now has a presence in IL based on it's affiliates. If they have a presence, then they have to collect sales tax on all sales within IL.

            Something like this would only affect you if you had affiliates in Indiana and Indiana passed a similar law. Then you'd be forced to collect sales tax on sales to IN residents....or you could choose to end your affiliate program in IN.
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            • Profile picture of the author Dave Rodman
              Banned
              PS. You'd hear a ROAR if all the sudden IL companies had to collect tax no matter where they sold to. They'd be forced to leave the state to compete. No question about it.
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        • Profile picture of the author steveblum
          Originally Posted by Dave Rodman View Post

          If you're in IL, then you'd already be collecting tax for sales to IL residents.

          You don't have to collect tax for sales to residents in other states.
          Right now under Illinois law you don't have to include sales tax on intangible items like e-books - because they're electronic, not physical. Not sure if or how this law will effect that.
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    • Profile picture of the author 2ndopkate
      Didn't our current president come from Illinois?

      My bet is that this tax trend will go national. I don't live in Illinois and I am calling my reps and sending letters. I suggest others do the same and nip this trend quick.

      Kater
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  • Profile picture of the author Ouroboros
    Jwardz,

    I feel your pain. As a life long resident of North Carolina I've been affected by this nonsense for a couple of years now.

    With the current state of the economy state legislatures are looking for any way possible to fund and justify their excess spending.

    What can you do? I've been actively lobbying for a repeal of the NC law (and election of a different set of legislators) but alas, I'm but a small voice among the sheep.

    In the case of your own personal situation, if their was ever an excuse for a press release this is it. Make the people in your niche aware of your plight and hope it opens a few eyes. At the very least it might get you an influx of "going out of business" orders.

    Its a bit disappointing to scan all the Amazon success stories and WSO's each day knowing that my state government has effectively eliminated that business model.

    Steve
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  • Profile picture of the author Bingo123
    Does anyone know why Amazon is not allowed in certain states in the US? It seems crazy. I would hate to be a resident in one of those states.
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  • Profile picture of the author ray777
    Could you just get a mailbox in another state?
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  • Profile picture of the author Jhet
    Here is a list of how people voted on this in IL:

    How suburban lawmakers voted on collecting Internet sales taxes
    Suzanne “Suzie” Bassi, R, Palatine Y
    Mark H. Beaubien Jr., R, Barrington Hills Y
    Robert A. “Bob” Biggins, R, Elmhurst Y
    Linda Chapa LaVia, D, Aurora Y
    Franco Coladipietro, R, Bloomingdale Y
    Sandy Cole, R, Grayslake N
    Michael Connelly, R, Lisle Y
    Fred Crespo, D, Hoffman Estates N
    Tom Cross, R, Oswego Y
    Keith Farnham, D, Elgin N
    Mike Fortner, R, West Chicago Y
    Jack D. Franks, D, Marengo N
    Paul Froehlich, D, Schaumburg Y
    Kay Hatcher, R, Yorkville N
    Sidney H. Mathias, R, Buffalo Grove Y
    Rita Mayfield, D, Waukegan N
    Emily McAsey, D, LockportN
    Rosemary Mulligan, R, Des Plaines Absent
    Elaine Nekritz, D, Northbrook Y
    JoAnn Osmond, R, Antioch Y
    Sandra M. Pihos, R, Glen Ellyn Y
    Randy Ramey, R, Carol Stream Y
    Dennis Reboletti, R, Elmhurst Y
    Angelo “Skip” Saviano, R, Elmwood Park Y
    Timothy L. Schmitz, R, Batavia N
    Darlene Senger, R, Naperville Y
    Carol Sente, D, Vernon Hills N
    Ed Sullivan Jr., R, Mundelein Y
    Michael Tryon, R, Crystal Lake N
    Mark Walker, D, Arlington Heights Y

    Both R and D voted for the bill.

    This bill will cause serious affiliates to form an LLC in another state where these types of laws have failed to pass or it could cause them to incorporate outside of the US entirely if that is more beneficial.

    Jhet
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  • Profile picture of the author Biggy Fat
    Believe me: If this whole tax thing goes national, Amazon will lose a TON of money, as the U.S. is one of their biggest markets and many affiliates are from the U.S. That's the reason why they have affiliates - to help them sell.

    Don't you even tell me they don't need affiliates - if they didn't, they wouldn't need an affiliate program.
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    • Profile picture of the author affenpinscher
      There are still states that don't have sales taxes (Delaware, Montana, Oregon, New Hampshire, Alaska). My psychic powers tell me many affiliates will be establishing bank
      accounts and LLCs in those states.
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    • Profile picture of the author Jhet
      Originally Posted by Biggy Fat View Post

      Believe me: If this whole tax thing goes national, Amazon will lose a TON of money, as the U.S. is one of their biggest markets and many affiliates are from the U.S. That's the reason why they have affiliates - to help them sell.

      Don't you even tell me they don't need affiliates - if they didn't, they wouldn't need an affiliate program.

      But they don't need affiliates in IL or any other state that passes these laws when other states have rejected these laws already.

      And if it did go national the top affiliates will have the money to incorporate outside the US. And even if the affiliates do not go outside the US, what about all the affiliates in other countries already? They are the real winners.
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  • Profile picture of the author mott
    Well I could be totally wrong, but I think the law on the books is, if your business is in Illinois and you sell something over the Internet, you have to collect sales tax for it (a "use tax" it's called). So in my case (or CC's), if I sell a product to someone, I have to charge sales tax for it. Just like when you go to the store in Illinois, you pay a sales tax on the item.

    The thing is, nobody does that! Nobody pays that "use tax". There's no real way to keep track of it with online sales, so it is left alone. Until now that is.

    My point is, the law has always been there, this pending bill is a way to enforce it. I don't know if it will be enforced on CC and me, or if it can be.
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  • Profile picture of the author skidog30
    Sad to say I'm in Colorado and our esteemed state folks did put a law like this into action last year. Got the same letter. Amazon, Walmart, Overstock, and many others simply will not approve affiliates if you live in the "bad" states. If it goes national, I would think the big affiliate companies like Amazon etc. would have to do something in their systems to adjust, or simply lose tons of business.

    I'm wondering if we can just incorporate in states where the chance of it passing is much lower? Or simply use a friends address in a state where it does not have the tax laws. But all states are at risk as long as we have our current "man" leading the country.

    CB
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  • Profile picture of the author wendymay1
    sorry to hear about this sales tax. Hope something positive comes your way.

    I've never heard about a sales tax of this magnitude here in New Zealand.

    all the best.
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  • Profile picture of the author AFI
    This is frustrating and I'm so sorry. Move to New Hampshire, we have no sales tax here
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    • Profile picture of the author mott
      Originally Posted by AFI View Post

      This is frustrating and I'm so sorry. Move to New Hampshire, we have no sales tax here
      But what's in New Hampshire? At least we have pizza.
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  • Profile picture of the author DeborahDera
    Originally Posted by jwardz View Post

    I received an email from Amazon Associates stating they will be terminating my participation in the Amazon Associates program as soon as the Governor of Illinois signs a new tax bill (that was passed by the legislature). I live in Illinois. The tax bill affects anyone selling products on the Internet. Anyone who purchases goods from a seller who lives in Illinois will have to pay Illinois sales tax. This is essence puts us out of business. Why would anyone want to pay an extra 6.25% when they could go to someone else who lives in another state and pay no sales tax on the same product. Other states are also considering this law. I started doing IM and have 7 sites and all will be affected by this law. 5 of my sites are Amazon Affiliate sites, 1 is an Amazon store selling text books (brings in good money) and 1 is a bird toy store selling products and has a few affiliate links. I am trying to stay calm. Below is the email I received from Amazon:

    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,
    I am not sure why Amazon would terminate agreements with all of these buyers. eBay allows users to charge sales tax in the states they need to (their home states), while purchasers from other states do not pay sales tax. Why can't Amazon modify their system a bit?
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    • Profile picture of the author Dave Rodman
      Banned
      Originally Posted by DeborahDera View Post

      I am not sure why Amazon would terminate agreements with all of these buyers. eBay allows users to charge sales tax in the states they need to (their home states), while purchasers from other states do not pay sales tax. Why can't Amazon modify their system a bit?
      Amazon is simply weighing the cost vs. benefits. It's either...

      Option A: Allow affiliate to sell. Amazon then must collect sales tax on ALL (every purchase) made by Illinois residents.

      Option B: Cut off affiliates. You lose some revenue, but every resident of IL can still buy without paying sales tax.

      That's a no brainer...clearly Option B is the best choice. They might lose some sales from the affiliates, but they're bringing the cost down for all their purchases in IL.
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  • Profile picture of the author evollusion
    Good lord I'm glad I live in one of the most business friendly states in the US.

    Move to Texas. We love business here.
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  • Profile picture of the author remodeler
    Here is a link to the email and phone info for the IL Gov.

    Governor : Contact the Governor

    Springfield, IL 62706
    Phone: 217-782-0244

    Chicago, IL 60601
    Phone: 312-814-2121

    I've emailed and called. All you have to do is tell the "intern" they you oppose House Bill 3659. Takes 30 seconds. I urge everyone to call and voice their opinion. They do NOT ask you what state you even live in. So even if IL is not your state, make the call. Take a stand and let your voice be heard.

    You may think that because you live in a different state that this will never affect you, but the truth is that more states are already working on doing this. If we don't rise up now then we might as well just lay down and take what we get.
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  • Profile picture of the author Bruce NewMedia
    Its too bad whats happened to IL in the last decade.

    The politics have shifted considerably, forcing businesses to pay more and more. The state is deeply in debt, (one of the worst in the country) and just re-elected mostly the same politicians who put us there.

    I just read we've got one of the highest rates of job loss in the country as well. You'd think they would want to encourage as much self-employment as possible to try and offset the huge job losses, but not so.

    Cook county has the highest sales tax rate in the country, I believe. Now, they're proposing raising state income tax by 75%. ...and the political class lives like royalty.
    Its sickening.
    _____
    Bruce
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    • Profile picture of the author CDarklock
      Originally Posted by brucerby View Post

      The politics have shifted considerably
      Okay, let me see here.

      The state is deeply in debt and has one of the highest rates of job loss in the country. Since lost jobs translate into requests for state assistance, these are compounding problems.

      So it's making businesses pay more and more, and planning to raise the income tax.

      Um... what is the problem? The state needs money. It gets money from taxes. So it's raising taxes. What did you expect them to do?
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      "The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
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      • Profile picture of the author Dave Rodman
        Banned
        Originally Posted by CDarklock View Post

        Okay, let me see here.

        The state is deeply in debt and has one of the highest rates of job loss in the country. Since lost jobs translate into requests for state assistance, these are compounding problems.

        So it's making businesses pay more and more, and planning to raise the income tax.

        Um... what is the problem? The state needs money. It gets money from taxes. So it's raising taxes. What did you expect them to do?
        They need money because they've misspent money for the last decade. My wife is a teacher in IL (Public employee) and she has a pension that maxes out after 30 years at 75% of her HIGHEST 3 years salary. She contributes 11% of her paycheck to her pension. So multiply that by all state employees and do the math. If you don't fix that problem, don't come to the residents and start asking for more money.

        Because when you raise taxes too much, you see the problems that states like MD have had. Businesses do have the choice to move from state to state. And right now businesses/individuals are leaving the state of IL in record numbers. It's kinda unfortunate because most of these states seek to soak the rich, but they are the ones that are most mobile. So the poor/middle class get stuck with the bill. Or with no jobs.

        Millionaires Go Missing - WSJ.com
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        • Profile picture of the author CDarklock
          Originally Posted by Dave Rodman View Post

          They need money because they've misspent money for the last decade.
          How does that change the fact that they get money from taxes?

          Your pension example is a good one, actually.

          Let's say the state says "we can't afford to do this."

          They do have to get a vote from the people to reduce teacher pensions, right?

          Who the hell is going to say "yes, pay our teachers less when they retire" at the ballot box?

          And what kind of dick move is it to chop pensions the year before teachers retire?

          All you need is one guy who's going to retire next year, and he's the banner boy for "Illinois hates teachers and doesn't value our children's education."

          Screw that. Let's raise taxes.
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          "The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
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          • Profile picture of the author Dave Rodman
            Banned
            Originally Posted by CDarklock View Post

            How does that change the fact that they get money from taxes?

            Your pension example is a good one, actually.

            Let's say the state says "we can't afford to do this."

            They do have to get a vote from the people to reduce teacher pensions, right?

            Who the hell is going to say "yes, pay our teachers less when they retire" at the ballot box?

            And what kind of dick move is it to chop pensions the year before teachers retire?

            All you need is one guy who's going to retire next year, and he's the banner boy for "Illinois hates teachers and doesn't value our children's education."

            Screw that. Let's raise taxes.
            You're missing the point. Giving more money to people that mismanage it is like giving money to a gambler to pay off gambling debts, before he got his gambling problem under control. Nobody is talking about reforming the pension of a 65 year old. Reform it for all incoming public sector employees. DO SOMETHING to reduce waste.
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            • Profile picture of the author CDarklock
              Originally Posted by Dave Rodman View Post

              Reform it for all incoming public sector employees. DO SOMETHING to reduce waste.
              So your suggestion is to do something which will save the state money in thirty years.

              Why?

              It's not going to get the politicians who do it re-elected.

              It's going to make it harder to attract new public sector employees, which basically means the quality and quantity of those employees will drop, leaving fewer people to do a worse job of the work.

              And you'll see that a lot sooner than thirty years.

              The fundamental problem with government is that term lengths and limits make it difficult to do anything that really matters, and there is simply no incentive for the politicians to do it. What good would come of this for the governor who pushes this through the legislature? Won't he just be remembered as the guy who ruined the government?

              And thirty years from now, when the benefits of the new pension come around, the current governor will point at something he just did as the reason things are so much better. And everyone will cheer and applaud.

              We haven't exactly made it easy for politicians at the state and local levels to do good work. Instead, we've just made it easy for them to exploit their positions and influence to get rich. Why are we surprised?
              Signature
              "The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
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              • Profile picture of the author Dave Rodman
                Banned
                Originally Posted by CDarklock View Post

                So your suggestion is to do something which will save the state money in thirty years.

                Why?

                It's not going to get the politicians who do it re-elected.

                It's going to make it harder to attract new public sector employees, which basically means the quality and quantity of those employees will drop, leaving fewer people to do a worse job of the work.

                And you'll see that a lot sooner than thirty years.

                The fundamental problem with government is that term lengths and limits make it difficult to do anything that really matters, and there is simply no incentive for the politicians to do it. What good would come of this for the governor who pushes this through the legislature? Won't he just be remembered as the guy who ruined the government?

                And thirty years from now, when the benefits of the new pension come around, the current governor will point at something he just did as the reason things are so much better. And everyone will cheer and applaud.

                We haven't exactly made it easy for politicians at the state and local levels to do good work. Instead, we've just made it easy for them to exploit their positions and influence to get rich. Why are we surprised?
                Just allow states to raise taxes, spend money, and give away goodies in exchange for votes? It's your classic "Well, why do anything that's not going to kick in for 30 years!?!?" It sounds like maybe you want a King to run the states instead of elected officials.

                You can use band-aid approaches (raising taxes) when you've made the changes necessary to put you on the path of long-term financial health. If you haven't done that, then what's going to happen in another 10, 20, or 30 years? Our taxes are still at 4.75% (up from 3% currently), and now they'll need more money.

                And you'll never convince me that they'll be a shortage of people that want to work for the gov't. They should convert everyone to 403b plans with a match, just like the private sector. And if they have a problem with attracting talent, then raise the grade level for that position. Simple as that. Private sector companies do it everyday.

                There was an article in the Chicago Tribune the other month and it said that in order for the city to fully fund a cop's pension, they need to contribute 1-3x their SALARY every year.
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                • Profile picture of the author CDarklock
                  Originally Posted by Dave Rodman View Post

                  It's your classic "Well, why do anything that's not going to kick in for 30 years!?!?" It sounds like maybe you want a King to run the states instead of elected officials.
                  What I want is a system where people can make a positive difference. We don't have one. We've so dramatically restricted what state and local governments can do, they basically can't do anything that matters anymore.

                  So why should they? They're not going to get any credit for it. They're not going to get any benefit from it. And it's our fault the system is like this.

                  And you'll never convince me that they'll be a shortage of people that want to work for the gov't.
                  Oh, no, there won't be a shortage.

                  They'll just be stupider and less competent.
                  Signature
                  "The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
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                  • Profile picture of the author Dave Rodman
                    Banned
                    Originally Posted by CDarklock View Post

                    What I want is a system where people can make a positive difference. We don't have one. We've so dramatically restricted what state and local governments can do, they basically can't do anything that matters anymore.
                    I got a kick out of all the people that said things like "With obama in the WH and republicans in the House, we won't be able to get anything done for 2 years!!!" Yeah....sounds good to me! I'd much prefer to just give those politicians a rubix cube for a couple years and have them do nothing.

                    Oh, no, there won't be a shortage.

                    They'll just be stupider and less competent.
                    They're pretty stupid and incompetent now.
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                    • Profile picture of the author CDarklock
                      Originally Posted by Dave Rodman View Post

                      They're pretty stupid and incompetent now.
                      And therefore, making them stupider and less competent would be...

                      Well, stupid and incompetent.
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                      "The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
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      • Profile picture of the author Bruce NewMedia
        Originally Posted by CDarklock View Post

        Okay, let me see here.

        So it's making businesses pay more and more, and planning to raise the income tax.

        Um... what is the problem? The state needs money. It gets money from taxes. So it's raising taxes. What did you expect them to do?
        I expect them to not waste the hundreds of millions the way they do now. I could fill this forum with examples of waste in IL state government. Honestly, the examples are so unreal, you probably wouldn't believe it.

        Here's one: The former president of the Cook County board, Todd Stroger (SON of the last county board president, whose father was elected while in a coma) bought $250,000 worth of new furniture for some county offices just before his term ended, AND gave large raises to all his staff while he still had the power to do so.

        Sorry, but an attitude that 'the state needs money so just raise taxes' is what gets us into this mess in the first place.
        _____
        Bruce
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  • Profile picture of the author supersm
    I'm also in North Carolina and had this happen to me. I called, emailed, and wrote letters but it made no difference. They snuck it in as part of the budget for the year so you couldn't even have your representative vote on it separately.

    So no Amazon for me here along with dozens of other merchants that followed Amazon's lead.
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  • Profile picture of the author ce2gain
    I've lived in Cook County for the last 6 yrs, and I'm seriously so fed up with the politics and taxes that my husband and I have been making plans to relocate out of this state. We had a plan to wait until our youngest child graduates high school, but now that this bill is a potential, my husband is close to accepting a job offer that would relocate us in the next few months. This state is truly one of the worst political systems I've ever lived in (and I've lived in many states over the years). Getting the email from Amazon was sort of the straw that broke the camel's back for us.

    I still emailed and called the governor, though I hold out little hope for that making a difference. I can confirm that if you call the governor's number (listed in an above post) they do not ask where you live. I don't believe in sitting around and not at least making my position known. Please do make the call whether or not you live in Illinois. You never know when your state will be next.

    As for my IM plans, I'm going to focus 2011 on Amazon and affiliate alternatives. Again, there is no guarantee that where I relocate won't be next.
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  • Profile picture of the author tritrain
    I'm very glad to see so many people are up in arms about this.

    Now contact your representatives, including your governor!!
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  • Profile picture of the author tritrain
    Have you guys checked out Performance Marketing Association*|*Share Ideas. Explore Opportunities. Shape the Future.

    It's an advocacy group with Amazon and others associated with it.
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  • Profile picture of the author IMShoppingMall
    I have a very close friend who has a finger on the pulse of the Amazon Tax Law. According to my friend this is being "rolled out" (my words not my friend's) nationwide and its only a matter of time before all of the states get notified. So if you are in the affiliate biz you may want to be proactive with your local legislature.
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  • Profile picture of the author remodeler
    No doubt about it eventually finding its way across all states. I did hear this morning that the bill is on hold here in IL for the time being. I'm still trying to find out more on why and what's going on.
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  • Profile picture of the author Tbone350
    Hey guys

    Just take a look in this youtube video.

    Amazon tax debate

    I can't post the link because I have less than 15 post. So just go to youtube and type "Amazon tax debate"... then sort by upload date.. You'll see Rep. Dave Winters discusses the Amazon sales tax legislation.
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    • Profile picture of the author remodeler
      Originally Posted by Tbone350 View Post

      Hey guys

      Just take a look in this youtube video.

      Amazon tax debate

      I can't post the link because I have less than 15 post. So just go to youtube and type "Amazon tax debate"... then sort by upload date.. You'll see Rep. Dave Winters discusses the Amazon sales tax legislation.
      Thanks for posting the link. At least this guy gets it... sort of. But look at the guy he is talking to and the others on the chamber floor just doing their own thing. They are clueless and could care less. The result? The bill passed by large numbers. Govenor has 60 days to sign or veto, and so we wait.
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  • Profile picture of the author McGrrrrr
    This is coming to more and more states. Besides this another problem for amazon sellers is establishing a nexus if you use FBA.
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  • Profile picture of the author Tbone350
    For people living in Illinois, the best solution is to open an LLC in Wisconsin. See the good news below:

    Wis. gov uses Ill. tax hike to bolster his state
    January 12, 2011 8:35 AM
    Wisconsin Gov. Scott Walker is rolling out the welcome mat to Illinois businesses hours after lawmakers there approved a 66 percent income tax increase.

    Walker has proposed tax cuts on small businesses in Wisconsin and those that move to the state. He says those measures and others will make Wisconsin a more welcoming place to do business and on Tuesday and again today he specifically targeted companies in Illinois.
    The Republican referenced an old Wisconsin advertising campaign that targeted Illinois called "Escape to Wisconsin." Walker says he is renewing that call to Illinois businesses, encouraging them to "Escape to Wisconsin."

    Walker says, "You are welcome here. Our talented work force stands ready to help you grow and prosper."

    -- Associated Press
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    • Profile picture of the author mott
      Originally Posted by Tbone350 View Post

      For people living in Illinois, the best solution is to open an LLC in Wisconsin. See the good news below:

      Wis. gov uses Ill. tax hike to bolster his state
      January 12, 2011 8:35 AM
      Wisconsin Gov. Scott Walker is rolling out the welcome mat to Illinois businesses hours after lawmakers there approved a 66 percent income tax increase.

      Walker has proposed tax cuts on small businesses in Wisconsin and those that move to the state. He says those measures and others will make Wisconsin a more welcoming place to do business and on Tuesday and again today he specifically targeted companies in Illinois.
      The Republican referenced an old Wisconsin advertising campaign that targeted Illinois called "Escape to Wisconsin." Walker says he is renewing that call to Illinois businesses, encouraging them to "Escape to Wisconsin."

      Walker says, "You are welcome here. Our talented work force stands ready to help you grow and prosper."

      -- Associated Press
      I'd really like to know though, if opening an LLC would solve this issue. Is there anyone reading this who has opened an LLC and can avoid the IL sales tax on Amazon sales?

      I ask because opening an LLC is quite expensive, especially for IL residents. And I don't know how this solves this issue anyway, if it actually does.

      As far as moving to WI goes, I have considered moving there myself (not because of this bill, but other personal reasons), and it's a nice state and not a huge move for Chicago area residents. However, I wouldn't move anywhere just because of this bill, because WI can just as easily pass a similar bill someday. As can other states.

      And I would wait on any moves of this nature until Amazon actually pulls the plug.
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      • Profile picture of the author mike_f
        Originally Posted by mott View Post

        I'd really like to know though, if opening an LLC would solve this issue. Is there anyone reading this who has opened an LLC and can avoid the IL sales tax on Amazon sales?
        I'm interested to find out as well (I'm an Amazon affiliate in IL). Main motivation is not to avoid the IL tax but to avoid getting the boot by Amazon.

        Mike
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