Illinois Struggles to Collect Revenue From 'Amazon Tax'

Since last winter, Illinois has been trying to find a way to collect sales tax on internet retail sales and, despite signing the "Amazon Tax" into law in March, the state isn't getting the revenue it had expected.

The state doesn't have a clear way to enforce the law. Plus, online retailers Amazon and Overstock decided to shutdown their affiliate programs in Illinois to avoid paying the tax. Crain's Chicago Business writes:

It tried the honor system, with a reminder on income tax forms to prod individual taxpayers to pay up. Though compliance doubled, just 4.6% of taxpayers did so, paying $10.2 million.
Getting Internet retailers to collect sales taxes from customers doesn't look any more promising. A pair of local websites that channel orders from Amazon.com Inc. and Overstock.com Inc. recently left the state, circumventing a new Illinois law that would have used them as a conduit to tax sales by the giant online retailers.

The state had expected the "Amazon Tax" to bring in $150 million this year. But our own Prescott Carlson wrote in January that the math behind the legislation was flawed. On top of that, as online retailers close down their affiliate programs in Illinois, the state no longer has future sales tax to collect.

Two more web retailers Crain's mentioned as leaving Illinois are CouponCabin and FatWallet, which left for Indiana and Wisconsin, respectively. If you want to make good on unpaid sales tax in the last seven years, you have until Oct. 15 to take advantage of the state amnesty program on unpaid sales tax.

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By Samantha Abernethy in News on September 13, 2011 4:10 PM

Comments [rss]

GL2000

It's important to note that this attempted money grab came on the backs of small business affiliates. And caused more lost revenue that would have been available from the income tax paid by those affiliates. That's real, trackable, 1099 documented money.

Meanwhile Quinn sidles up to large corporate interests like Motorola and Sears. Sears issued PR statement supporting the Amazon Tax at the time it was up for signature. Since stealing incomes from small businesses across the state in his effort to make all of Amazon sales taxable, Quinn has given away $200 million in tax breaks to large companies.

With one side of their faces the Democrats demand "the rich" pay more, with the other, they funnel money to large corporations.

Sears avoided taxes for years in exchange for moving to Hoffman Estates when they fled the Willis Tower. Now they're hat in hand again.

As far as I'm concerned, Sears can follow Borders into oblivion.

Navin_Johnson

Interesting post, even if you are just a astroturfing account.

GL2000

Keep your astroturfing, that's a democratic tactic. The tea party doesn't need to manufacture, simulate or buy supporters, we have plenty of real members. Dems couldn't even bus in enough voters to save Weiner's seat.

I'm an affiliate. Quinn's tax grab cost me at least $10K and the state about $500 in income tax from me alone. Plus another $50 in sales tax when I would have spent it. Meanwhile Amazon marches on with my full support. I still send them traffic. I'm sure not going to send it to Sears after they sold out small businesses.