Will other States in America follow Illinois lead and make affiliate marketing illegal?

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11 years ago

Governor Quinn in Illinois has signed into law HB 3659 which essentially abolishes Affiliate Marketing in Illinois.This bill becomes a law in July of 2011.

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iAmNameLess 11 years ago

Originally Posted by John Wilkes

Governor Quinn in Illinois has signed into law HB 3659 which essentially abolishes Affiliate Marketing in Illinois.This bill becomes a law in July of 2011.

You are misinformed, the law is about taxes, the state of illinois wants taxes from amazon for the sales made by Illinois affiliates. Affiliate marketing itself, is NOT illegal in Illinois. Read again.
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Don Schenk 11 years ago

Originally Posted by John Wilkes

Governor Quinn in Illinois has signed into law HB 3659 which essentially abolishes Affiliate Marketing in Illinois.This bill becomes a law in July of 2011.

Uh John, did you actually read all of HB 3659? Please do so.

I just read the entire bill and... It does NOT abolish affiliate marketing.

Good grief! The sky is not falling. It just adds sales tax to products sold in Illinois by businesses outside the state.

:-Don

BTW, I just noticed you are not in the USA. HB3658 doesn't even affect you.
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- Hesaidblissfully 11 years ago
  
  An affiliate marketer is essentially just a commission only salesperson. I don't see how they could "outlaw" affiliate marketing without outlawing commission only sales staff altogether (In other words, I don't see it happening). As far as it being a threat to mom & pop stores, by that logic, they'd have to outlaw Ebay and Amazon and other online stores too, which again, I don't see happening.
  
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11 years ago

Governor Quinn has spoken unequivocally that the growing industry known as Affiliate Marketing is entirely unwelcome in Illinois. The measure will requires all major online retailers not just Amazon, to collect the state's 6.25 percent sales tax on all purchases made by Illinois residents.

The state of Illinois is about to pass a law that adds sales tax to online commerce if an affiliate in the transaction lives in Illinois.

So, if you were an online business,would you want to muck around with all this red tape or just stop accepting sales through an affiliate?

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DeborahDera

11 years ago

Originally Posted by John Wilkes

Governor Quinn has spoken unequivocally that the growing industry known as Affiliate Marketing is entirely unwelcome in Illinois. The measure will requires all major online retailers not just Amazon, to collect the state's 6.25 percent sales tax on all purchases made by Illinois residents.

The state of Illinois is about to pass a law that adds sales tax to online commerce if an affiliate in the transaction lives in Illinois.

So, if you were an online business,would you want to muck around with all this red tape or just stop accepting sales through an affiliate?

Why would it matter? The online business (Amazon) will still have to add sales tax to the purchaser's price whether the sale is made by an affiliate or not. The PURCHASER has to pay sales tax. Technically, sellers in any state have to So why not fix your system so that your affiliates can continue to refer business to your website (as, technically, that is what Amazon affiliates are doing)?

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Don Schenk

11 years ago

Originally Posted by DeborahDera

Why would it matter? The online business (Amazon) will still have to add sales tax to the purchaser's price whether the sale is made by an affiliate or not. The PURCHASER has to pay sales tax. Technically, sellers in any state have to So why not fix your system so that your affiliates can continue to refer business to your website (as, technically, that is what Amazon affiliates are doing)?

What matters to small businesses (us) is the tremendous amount of paper work this will create. I've had an Ohio vendor's license for some 40 years now. Each county in the state can add sales tax to the existing Ohio sales tax.

The result is each county has a different tax rate. A couple years ago Ohio decided vendors must collect different amounts of sales tax depending upon what county the products are shipped to.

It's a real PITA. Now add different sales tax amounts in every state, different county sales tax amounts, and an already impossible situation becomes crazier.

Large corporations have accounting and bookkeeping departments that can handle his. Small businesses don't.

Amazon is large enough to be able to deal with this, they just don't want to.

:-Don

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11 years ago

Originally Posted by Don Schenk

What matters to small businesses (us) is the tremendous amount of paper work this will create. I've had an Ohio vendor's license for some 40 years now. Each county in the state can add sales tax to the existing Ohio sales tax.

The result is each county has a different tax rate. A couple years ago Ohio decided vendors must collect different amounts of sales tax depending upon what county the products are shipped to.

It's a real PITA. Now add different sales tax amounts in every state, different county sales tax amounts, and an already impossible situation becomes crazier.

Large corporations have accounting and bookkeeping departments that can handle his. Small businesses don't.

Amazon is large enough to be able to deal with this, they just don't want to.

:-Don

Really though, under the current state constitutions and law, these businesses are not obligated to pay sales tax, nor county and local taxes, when THEY AREN'T EVEN LOCATED IN THE STATE!!!! The whole thing in my opinion is ridiculous.

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11 years ago

I think some of you are getting to tied up in the tax issue without looking at the results. Firstly, big companys like Amazon are simply getting rid of affiliates in the affected states rather than comply. Affiliates have been told " move state". Commission Junction,Shareasale and all the others are watching this intently to see how they should react.

On the ground level politicians are openly talking about getting rid of affiliates who they believe are damaging the local economies. They are not stupid, they can see that they are not going to get a big windfall increase in taxes.

The shame is that this bill does not help "mom & pop" shops who have been convinced that affiliates are unfair competition but it does help the likes of Walmart, Target, K-Mart etc... by making their prices more competitive.

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11 years ago

Originally Posted by John Wilkes

I think some of you are getting to tied up in the tax issue without looking at the results. Firstly, big companys like Amazon are simply getting rid of affiliates in the affected states rather than comply. Affiliates have been told " move state". Commission Junction,Shareasale and all the others are watching this intently to see how they should react.

On the ground level politicians are openly talking about getting rid of affiliates who they believe are damaging the local economies. They are not stupid, they can see that they are not going to get a big windfall increase in taxes.

The shame is that this bill does not help "mom & pop" shops who have been convinced that affiliates are unfair competition but it does help the likes of Walmart, Target, K-Mart etc... by making their prices more competitive.

John, I STILL don't know what you're trying to say in every post...

Illinois will lose money over this, not gain. Politicians are not openly talking about getting rid of affiliates. My family is in law, and politics. Fortunately I am able to learn quite a bit from them, and kind of have a head start in certain areas. The house, and senate in Illinois passed this, not to get rid of affiliates, but to get more money from the corporations. This way NOT done to HURT THE AFFILIATES! Illinois doesn't care if someone does affiliate marketing. Illinois just wants money, that is all, it comes down to money.

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dfs_dean 11 years ago

It isn't that Illinois is against affiliates. In fact, if it weren't for the affiliates the state would have no way to attempt to force Amazon, O.co, or other online retailers to collect taxes for them. They are using the affiliates to create the nexus - claiming Amazon, et al have a physical presence in the state because of the affiliates.

Amazon does collect sales tax for sales shipped to Kansas, Kentucky, New York, North Dakota, and Washington so they do have the accounting mechanism to handle state sales taxes. But they include the sales tax because they do have a physical presence in those states as a company. Not because of affiliates living in those states.

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Black Hat Cat Banned 11 years ago

Originally Posted by DeborahDera

Why would it matter? The online business (Amazon) will still have to add sales tax to the purchaser's price whether the sale is made by an affiliate or not.

No they don't, not unless Amazon is located in the state the customer is buying from. If they aren't, then no sales tax is collected.

Why Clickbank and Amazon do not do this for the different states taxes I have no idea. The system is already in place and it solves the problem.

CB already does it in the U.S. If I buy something from CB, I have to pay North Carolina sales tax because of a similar law in NC. So, what I do is pick a different state when I buy something, and voila', no sales tax. As for why Amazon doesn't do it, that's simple...because they aren't obligated to.
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11 years ago

Well, either way, Illinois hasn't outlawed affiliate marketing. Illinois is just taxing those corporations, thats all. It isn't illegal, it isn't abolished, Amazon could have put up with it if they wanted to but they didn't. They will reconsider though, since the other states will follow suit. Either that or they will need to have a big legal fight over this.

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Buford Mobley 11 years ago

It has happened in North Carolina. I fault both Amazon and the state of North Carolina for not being able to resolve the issue.
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11 years ago

Affiliate marketing has been described as a blight on "mom & pop" shops and in the interests of fairness, it should be legislated against to even the playing field in Illinois.

http://www.perrymarshall.com/14384/i...ate-marketing/

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11 years ago

Originally Posted by John Wilkes

Affiliate marketing has been described as a blight on "mom & pop" shops and in the interests of fairness, it should be legislated against to even the playing field in Illinois.

I'm not sure what you're trying to say in your posts... Are you still trying to say it is illegal or what? You're just posting generic lines that were in that article.

Facts:
Affiliate marketing is legal in illinois
Amazon dropped illinois affiliates, not because of the legality, but because it would probably cost amazon more to keep those kinds of records than it would be to just drop illinois affiliates.
Pat Quinn is a moron, and is just hoping to find a way to generate more revenue in our almost bankrupt state.

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nubchai

11 years ago

Originally Posted by iAmNameLess

I'm not sure what you're trying to say in your posts... Are you still trying to say it is illegal or what? You're just posting generic lines that were in that article.

Facts:
Affiliate marketing is legal in illinois
Amazon dropped illinois affiliates, not because of the legality, but because it would probably cost amazon more to keep those kinds of records than it would be to just drop illinois affiliates.
Pat Quinn is a moron, and is just hoping to find a way to generate more revenue in our almost bankrupt state.

That's the best summary of the situation in Illinois that I've read

Sandy

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koolphoto

11 years ago

Yes. I think all states will eventually enact some sort of sales tax for affiliate online sales. States like everyone else are always looking for ways to increase income.

The internet is still a new frontier and just like every other enterprise it will eventually be government regulated and taxed.

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Brianne

11 years ago

Originally Posted by nubchai

That's the best summary of the situation in Illinois that I've read

Sandy

Agreed. And this is exactly where the path will lead...

Originally Posted by koolphoto

Yes. I think all states will eventually enact some sort of sales tax for affiliate online sales. States like everyone else are always looking for ways to increase income.

The internet is still a new frontier and just like every other enterprise it will eventually be government regulated and taxed.

State govt will need to make sure they have their hand in the money jar. It's inevitable.

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Black Hat Cat

Banned 11 years ago

Originally Posted by John Wilkes

Affiliate marketing has been described as a blight on "mom & pop" shops and in the interests of fairness, it should be legislated against to even the playing field in Illinois.

Illinois will crush affiliate marketing if you don’t act now.

But it HASN'T been legislated against. That's the point. Feelings aren't law. This law does not make affiliate marketing illegal in Illinois, no matter what the Governor's feelings are on the issue.

And the governor is an idiot. The playing field is even(whatever that means) already. There is nothing stopping "mom and pop" shops from affiliate marketing themselves, or selling their own products on the internet. Sheesh, no wonder Illinois can't pay its bills. The state is run by idiots.

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Ouroboros

11 years ago

Affiliate Marketing is no more illegal in Illinois than pot is in California. All of the states want their cut of the sales taxes because of ignorant mis-management of the fees they extort from their citizens.

Amazon, and several other online retailers, are not willing to keep the kind of records required to pay state sales taxes to dozens of money grubbing states. Several other states have already been affected, including mine.

Do some research on the forum for more states that have been affected.

Steve

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SocialMediaOwls

11 years ago

Illinois sucks

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Colin Palfrey

11 years ago

From what I have read, it actually appears to be the citizens in their state making purchases that they want to tax.

Honestly, that shouldn't be a surprise, as taxes are a pretty acceptable thing for a government to ask for.

All Amazon need to do is the same thing as Clickbank do, add local taxes to the shopping cart. I know you don't see Clickbank doing this in the US, but change your country in the shopping cart to Ireland and you will see the Irish tax added on. The same applies for most European countries.

Why Clickbank and Amazon do not do this for the different states taxes I have no idea. The system is already in place and it solves the problem.

Cheers,
Colin Palfrey

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Mark Gubuan

11 years ago

Originally Posted by Colin Palfrey

All Amazon need to do is the same thing as Clickbank do, add local taxes to the shopping cart. I know you don't see Clickbank doing this in the US, but change your country in the shopping cart to Ireland and you will see the Irish tax added on. The same applies for most European countries.

This seems to be a really simple solution and would work. Coming from a finance background, the government just wants its tax revenue and business is suffering because of it.

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DominicF

11 years ago

Can't IM's in Illinois just set up a company in a different state to get around this?

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11 years ago

Originally Posted by DominicF

Can't IM's in Illinois just set up a company in a different state to get around this?

Yes... you can either set up an LLC in another state, or you can just use a mail forwarding service in another state.

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Alan Petersen

11 years ago

Originally Posted by iAmNameLess

Yes... you can either set up an LLC in another state, or you can just use a mail forwarding service in another state.

It's not the simple. Consult with a tax accountant/CPA. Simply mail forwarding won't cut it by a long shot.

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11 years ago

Originally Posted by Alan Petersen

It's not the simple. Consult with a tax accountant/CPA. Simply mail forwarding won't cut it by a long shot.

Why is that? State of illinois wouldn't be able to enforce it.

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Alan Petersen

11 years ago

Originally Posted by iAmNameLess

Why is that? State of illinois wouldn't be able to enforce it.

Physical presence. That's the whole battle Amazon is fighting in not collecting sales tax.

If you live and do business out of California or Illinois or any other state you can't get out of paying your state taxes because you have a PO box in Delaware that forwards to your address in CA.

But please make sure to talk to a CPA about these big decisions.

Amazon has a done a great job trying to fight these states but I doubt they'll be able to keep fending them all off. All that uncollected sales tax is like chum in the water for these broke-ass states.

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11 years ago

Originally Posted by Alan Petersen

Physical presence. That's the whole battle Amazon is fighting in not collecting sales tax.

If you live and do business out of California or Illinois or any other state you can't get out of paying your state taxes because you have a PO box in Delaware that forwards to your address in CA.

But please make sure to talk to a CPA about these big decisions.

Amazon has a done a great job trying to fight these states but I doubt they'll be able to keep fending them all off. All that uncollected sales tax is like chum in the water for these broke-ass states.

WE aren't selling anything directly, just referring and if we use an address out of state, the only taxes due to the state is our income if over $600.

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