Recently, Illinois Gov. Pat Quinn signed into law a bill that will require in-state affiliates to collect state sales tax on purchases made by Illinois residents. Shortly after this bill was signed, Amazon.com announced that it intends to end its affiliates program with Illinois residents.
Amazon has previously opposed similar efforts in other states. In a recent letter, Amazon informed approximately 9,000 Illinois affiliates that the program will terminate on April 15. The letter read:
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.
The letter concluded by saying that Amazon would be interested in resuming the affiliate business relationship "if this situation is rectified." Amazon previously discontinued its affiliate programs in Colorado, North Carolina, and Rhode Island over similar disputes.
Why are all the states going after Amazon? Texas just had a whole distrobution center shut down, with the lose of jobs and property taxes.
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