Amazon Ends Relationship With Illinois Affiliates

13 replies
Well this sucks, as I have been getting a solid income from Amazon the last few months. It's official Amazon has ended it's agreement with Illinois affiliates. Here is the email I received this morning, just in case anyone missed it in their inbox:

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



Oh well gotta keep it moving...Thank God for multiple and diversified streams of Income, NEVER put all of your IM eggs in one IM basket!
#affiliates #amazon #ends #illinois #relationship
  • Profile picture of the author moneyjunkie
    I suggest any AA make preparations to move your business to FL or WY. I can't say for sure in this economic environment but, these states don't have income tax so I don't see them hopping on the band wagon. There is always a loophole when it comes to making money. It would involve setting up a Corporation or LLC but, if your bringing home the bacon with AA then it's a no brainer really.
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    • Profile picture of the author explosion
      Originally Posted by moneyjunkie View Post

      I suggest any AA make preparations to move your business to FL or WY. I can't say for sure in this economic environment but, these states don't have income tax so I don't see them hopping on the band wagon. There is always a loophole when it comes to making money. It would involve setting up a Corporation or LLC but, if your bringing home the bacon with AA then it's a no brainer really.
      Makes sense I was thinking of doing this, as you said there is always a loophole, I knew FL didn't have income tax, but didn't know about WY, so thanks for the info.
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  • Profile picture of the author remodeler
    State income tax isn't the issue. It is state sales tax that is at the heart of the matter for Amazon.
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    • Profile picture of the author jmartinez
      I just signed up with amazon a week ago so I could promote specific products for a new site I have been working on for a few weeks now. So, yea this really stinks.

      Is the solution to get a new residence with PO box in another state? I've never setup a business such as LLC, but would this be the way to go as another posted suggested? If so, how does this get around things?

      Update:

      Maybe I found my answer. Found this quote on eHow at the wyoming LLC information page:

      "There are no age or residency requirements to form an LLC in the state of Wyoming. Anyone living in any state can form a Wyoming LLC."

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  • Profile picture of the author BridgetSielicki
    You can't help but hope that Amazon stops playing hardball this way as more and more states are beginning this change. They don't have to drop the Associates, it just requires more work on their end to collect the tax. It is up for a vote soon in CA again and the state is in such a budget mess that legislators are likely to vote the same way Illinois did. You would have to think that dropping a state the size of CA would have a huge detrimental impact for Amazon, so hopefully they decide to change things.
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    • Profile picture of the author Trivum
      Originally Posted by BridgetSielicki View Post

      You would have to think that dropping a state the size of CA would have a huge detrimental impact for Amazon, so hopefully they decide to change things.
      But that can work both ways. All those people in California who make their living selling on Amazon will not be happy. They pay income tax. They pay all sorts of other taxes there. They spend all their money there. And I imagine a good proportion of them also vote.

      If they make their living with Amazon, of course something like that would easily be enough for them to pack up and move to another state.

      Entrepreneurs are not the type of people you want moving out of your state.
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      • Profile picture of the author Kay King
        Let's face it - Amazon is a huge market. People will continue to buy from amazon and cutting the number of affiliates will be more money for those who are left. I think that's how Amazon looks at it - and it makes sense from their viewpoint.

        I doubt sales at Amazon will be affected - but income of the affiliate is where the problem is.

        If I'm looking for an item to purchase I might google it. I might end up on an affiliate's site and buy through their amazon link. If I don't find what I want, I'll go directly to Amazon. I think that's what many people do.

        We are accustomed to thinking less affiliates equals less sales. In the case of Amazon, I'm not sure that rule applies.

        kay
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        • Profile picture of the author davidjames42973
          This is horrible news for affiliates in Illinois. This is why it's important to have various streams of income instead of having income come from only one source.

          California has been going through this battle too. At the moment we're in the clear, but I'm sure they'll begin talking about this again soon...
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      • Profile picture of the author MarksWineClub
        Guys....from someone who started a business constantly under similar threats....you can only find the best possible place to park your business and hope for the best honestly.

        There has been a bill to end all direct shipments of wine each year I've been in business, with varying amounts of support. I live and am based in California though where we take our wine shipments seriously, so I am as protected as humanly possible.

        I guess my point.....if it is a big concern, get yourself a self forwarding PO Box in Wyoming which seems best in class for online sales thus far and go from there.

        It sucks, but it is happening across a wide variety of industries both online and offline right now because the economy hasn't turned around.
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  • Profile picture of the author eta32
    Banned
    But sales are conducted in cyberspace so how can they do that? Your phtsu=ical location doesnt matter doesn it?
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    • Profile picture of the author jan roos
      Originally Posted by eta32 View Post

      But sales are conducted in cyberspace so how can they do that? Your phtsu=ical location doesnt matter doesn it?
      The States are saying that Amazon sells products to residents in their state and therefore they need to pay Tax on the sales. Amazon says no because they do not have a physical presence in the state and then the state says yes they have a presence if they have affiliates that lives in the state so Amazon drops the affiliates.

      Bunch of B.S in my opinion. I will be leaving when it happens in CA. All the income tax they will lose from affiliates in CA will be stupid especially since the state is already broke.

      Cheers
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      • Profile picture of the author myob
        It's unlikely other large states will follow Illinois. They will find this to be a significant loss in their tax base. Amazon threatened to pull out of Texas where it has a huge distribution center, so the governor recently changed his mind and intervened saying "This may be a big mistake." So as of right now the Texas legislature is scrambling to make new rules to keep Amazon from leaving Texas. Of course I'm watching this carefully, but California actually has more affiliates than Texas. Other affiliate programs are wooing affiliates in states at risk such as CJ, Shareasale, Walmart, and Best Buy. This pissing match has actually been going on for 5-6 years, so if it does finally happen in California, many affiliates are prepared. It's not much more than changing the affiliate links over to similar products.
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  • Profile picture of the author Sus57
    It REALLY does suck, I just now found out about it as I was trying to sign up for an amazon association account. I would assume that we as residents of the different states pay the taxes on what we sell through this and everything else we promote on our websites/blogs...I also thought about leaving, I live in Illinois which is one of the states that are now excluded. But what to do if all states are going to adopt that law?
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