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Amazon Closes Illinois Affiliates After Quinn Signs Online Tax Bill

By Chuck Sudo in News on Mar 11, 2011 2:00PM

2011_3_11_amazon.jpg Online retailer Amazon barely waited for the ink to dry on Gov. Quinn's signing of HB 3659 into law by dropping its Illinois-based affiliates. HB 3659 requires all online retailers with a business presence in Illinois, like Amazon's affiliate program, to collect state sales tax on online purchases. In a statement to its Illinois affiliate owners, Amazon said, “We had opposed this new tax law because it is unconstitutional and counterproductive. We deeply regret that its enactment forces this action.”

Rebecca Madigan of the Performance Marketing Association writes on her blog that Quinn's signing of HB 3659 is "a huge blow" to Illinois business.

"(T)he Governor sided with big-box retailers, who are making this huge ‘e-fairness’ push around the country. It is a huge collaborative effort sponsored by Walmart, Target, Best Buy, Sears and Barnes and Noble, to name a few, to deliberately target Amazon. Unfortunately, they have been extremely persuasive, convincing Governor Quinn that he needed to pass this law. As we have seen in other states, this in fact will not gain the state any new revenue in the form of sales tax collection, because hundreds of online retailers will terminate their affiliates. In fact, the state will lose income tax revenue because affiliates will either see a dramatic reduction in their income (>25% in most cases), or will move out-of-state."

Madigan's analysis closely mirrors Prescott's take on HB 3659. (As Prescott previously noted, some of his income is derived from affiliate marketing.)

One Illinois-based Amazon affiliate owner is not pleased with the decision to drop its programs in the state. Roger Ebert took to his Twitter feed to voice his opinion that Amazon is wrong. Ebert had recently begun using his Twitter feed to sell specific items on his own affiliate program (the reasons for which he eloquently laid out here). Another tweet he posted shortly after Amazon's decision was announced read that the affiliates will run through April 15, certainly an ironic date.

"I have 20 more days to make a fortune," Ebert wrote.