Illinois Targets Amazon.com With Sales Tax Legislation; Amazon.com Fights Back!

[FrankRep]

http://www.thenewamerican.com/images/stories2011/10aMarch/illinois-state-capitol.001.jpg



Amazon drops its Illinois affiliates to avoid paying sales tax under a newly enacted state law targeting online retailers.


Illinois Sales Tax Law Leaves Amazon Affiliates High and Dry (http://www.thenewamerican.com/index.php/tech-mainmenu-30/computers/6673-illinois-sales-tax-law-leaves-amazon-affiliates-high-and-dry)


Michael Tennant | The New American (http://www.thenewamerican.com/)
13 March 2011


In its attempt to force online retailers to collect sales tax on items purchased in the Land of Lincoln, the state of Illinois may have just cost its treasury $5 million a year. That’s because the prime target of the state’s newly enacted sales tax legislation, Amazon.com, has ceased paying commissions to Illinois-based affiliates who refer people to its website.

According to Rebecca Madigan, director of the Performance Marketing Association, an affiliate trade group, Amazon’s decision is likely to result in a loss to the state of 25 to 30 percent of affiliate tax revenues, which totaled $18 million in 2009, “because the affiliates will lose business, cut jobs or move out of the state,” the Wall Street Journal reports (http://online.wsj.com/article/SB10001424052748704399804576193212782052704.html). The new law, she said, “has a devastating impact.”

Surely this is not what Illinois legislators had in mind when they passed the law, nor Gov. Pat Quinn (D) when he signed it. (Quinn, in fact, declared that the law would “protect and create jobs and help us continue to grow in the global marketplace.”) They undoubtedly expected Amazon, despite its threat to do precisely what it has done, simply to roll over and start collecting sales tax on every purchase made by an Illinois resident or business. Amazon, however, recognized the additional costs that collecting the tax would impose on both itself and its customers and decided to fight back; and there is nothing Illinois can do about it short of repealing the law.

In a letter to Illinois-based affiliates — websites that refer visitors to Amazon and collect commissions if those customers make purchases — Amazon said, “We had opposed this new tax law because it is unconstitutional and counterproductive. We deeply regret that its enactment forces this action.” It will not, after all, be good for Amazon’s business relationships and could potentially reduce traffic to its website.

Illinois is not the only state trying to tax online purchases. New York, Hawaii, Rhode Island, and North Carolina have passed laws similar to the one in Illinois; Amazon is challenging New York’s law in court and is collecting the sales tax in the meantime. California is considering similar legislation, and Amazon has warned Sacramento that it will drop California affiliates if the law passes.
...


SOURCE:
http://www.thenewamerican.com/index.php/tech-mainmenu-30/computers/6673-illinois-sales-tax-law-leaves-amazon-affiliates-high-and-dry

[MozoVote]

This didn't work in North Carolina either. As more state legislatures do this, the affiliates will keep fleeing. Maybe until there is a critical mass in the remaining states that can prevail on their representatives, to leave them alone. New Hampshire, perhaps?

Illinois is going down the tubes. At least until recently, it did have a low flat income tax. You could retire and live cheaply in the corn fields.

[tangent4ronpaul]

Good for Amazon!

They bailed on Tx too for something similar, relocating a distribution center and costing Tx a lot of jobs.

-t

[Batman]

Since when does Amazon know anything about constitutionality?

[low preference guy]

Since when does Amazon know anything about constitutionality?

They can open the constitution and read it like anyone else can

[aGameOfThrones]

The legislators are just so damn Greedy, they (gov), after all are getting payed taxes, they just want more and more.

[Batman]

They can open the constitution and read it like anyone else can

They didn't open it when Julian Assange was being unfairly targeted by the US government.

[low preference guy]

They didn't open it when Julian Assange was being unfairly targeted by the US government.

why do you say that? they can host or not host whatever they want. maybe they thought it was bad publicity.

[Batman]

Sure it was. They caved to government pressure on that issue. So I don't buy their line of defending the Constitution. They invoke the Constitution when it suits them. It's just bad PR raising the prices on their services. That alone is the reason they don't want to collect sales tax.

[low preference guy]

Sure it was. They caved to government pressure on that issue. So I don't buy their line of defending the Constitution. They invoke the Constitution when it suits them. It's just bad PR raising the prices on their services. That alone is the reason they don't want to collect sales tax.

who cares. what matters is that they are fighting for low taxes.

[Texan4Life]

I applaud amazon. I for one love not paying sales tax, not to mention free super saver shipping kicks ass.

[AZKing]

Good, good. They don't need more revenue.

[FrankRep]

They didn't open it when Julian Assange was being unfairly targeted by the US government.
Amazon.com has a right to chose who they host.

[Batman]

Amazon.com has a right to chose who they host.

They sure do. But when the chips are down you already know they'll choose convenience over what's right.

[low preference guy]

They sure do. But when the chips are down you already know they'll choose convenience over what's right.

why don't you host Assange? it'd be more productive to do something good yourself rather than cry like a baby.

[Batman]

Ease off. I'm just saying there was plenty of hostility for Amazon last winter on these forums and today they're the embodiment of Freedom.

[low preference guy]

Ease off. I'm just saying there was plenty of hostility for Amazon last winter on these forums and today they're the embodiment of Freedom.

maybe in your imagination. most posters just said they're happy about this specific action.

[FrankRep]

Ease off. I'm just saying there was plenty of hostility for Amazon last winter on these forums and today they're the embodiment of Freedom.
Amazon.com is a Business, not a political activist organization.

[TroySmith]

Looks like somebody at Amazon read Atlas Shrugged maybe :)

[aGameOfThrones]

Traditional retailers like Sears, Barnes & Noble, Best Buy and Wal-Mart applaud efforts to require Amazon to collect sales tax. They call it a matter of fairness because their stores do.

“I think it puts all retailers at a disadvantage,” William R. Harker, senior vice president at Sears Holdings, said of Amazon’s sales tax obligations. “What we and other retailers are looking for is for the playing field to be level.”


http://www.nytimes.com/2011/03/14/technology/14amazon.html?pagewanted=1&_r=1&hp


Sucks to be the other stores, but I buy from amazon a lot because of the free shipping and no sale tax!

[AZKing]

http://www.nytimes.com/2011/03/14/technology/14amazon.html?pagewanted=1&_r=1&hp


Sucks to be the other stores, but I buy from amazon a lot because of the free shipping and no sale tax!

LOL, Wal-Mart of all places is going to complain about being fair? They should go tell all of their sweat shops that.

[TCE]

Coupon Cabin and other similar stores are hopping the border to Indiana, and on the other end, I have heard some may be heading to Wisconsin as well. It's not like this state is anything close to business-friendly anyway, so every extra regulation or tax is going to force even more companies out.

And all of you guys will love this totalitarian piece of the Illinois Legislation:

The law is requiring every Illinois citizen to tabulate all of their online receipts from stores that did not collect sales tax and send that money into the Treasury from December 2004 to December 2010. If you don't remember, you can send $3 (or $7, can't remember which) per $10,000 of income you earn per year. If you don't, the State of Illinois has the authority to penalize you as a tax evader after this "grace period" is over.

[low preference guy]

the "laboratories of democracy" thing is working for once

[low preference guy]

And all of you guys will love this totalitarian piece of the Illinois Legislation:

The law is requiring every Illinois citizen to tabulate all of their online receipts from stores that did not collect sales tax and send that money into the Treasury from December 2004 to December 2010. If you don't remember, you can send $3 (or $7, can't remember which) per $10,000 of income you earn per year. If you don't, the State of Illinois has the authority to penalize you as a tax evader after this "grace period" is over.

does "stores" refer to stores in the state only?

[TCE]

does "stores" refer to stores in the state only?

Online stores that have any kind of presence in the state. I have seen warnings about this on the news multiple times this week that we all have to pay the state or else. Something about that retroactive penalty tax seems pretty unconstitutional to me. And yes, I know, states rights, but I still sense extra-constitutionality here. Comments from anyone?

[low preference guy]

Online stores that have any kind of presence in the state.

ok. so if you buy from amazon, you don't pay, right? if so, i hope other online stores follow suit.

[ivflight]

Online stores that have any kind of presence in the state. I have seen warnings about this on the news multiple times this week that we all have to pay the state or else. Something about that retroactive penalty tax seems pretty unconstitutional to me. And yes, I know, states rights, but I still sense extra-constitutionality here. Comments from anyone?

There is nothing retroactive about it. Illinois has required citizens to pay a 'use tax' (sales tax on anything you buy that isn't otherwise taxed, like most internet purchases) for a while now, but no one does because it is impossible to enforce and most people don't even know they're supposed to pay it. Recently, IL came up with this program where if you fess-up and pay all your past due use tax any penalty will be forgiven. People still won't do it for the same reasons.

This is going to be one of those things where now every person is a criminal and the govt gets to choose which people they don't like and fuck with them.

[nobody's_hero]

Online stores that have any kind of presence in the state. I have seen warnings about this on the news multiple times this week that we all have to pay the state or else. Something about that retroactive penalty tax seems pretty unconstitutional to me. And yes, I know, states rights, but I still sense extra-constitutionality here. Comments from anyone?

It seems so. I think someone would have a good lawsuit on their hands if the state tried to collect.

EDIT; just read ivflight's post. Has anyone tried to challenge the tax in court?

[Kregisen]

LOL, Wal-Mart of all places is going to complain about being fair? They should go tell all of their sweat shops that.

You think wal-mart should stop buying from sweatshops so the people in poor countries will starve to death instead of having income? Nice.

How about we reduce corporate taxes so more companies will compete for labor overseas and sweatshops will be paying higher wages?

Didn't know you were anti-freedom AZKing!

[AZKing]

You think wal-mart should stop buying from sweatshops so the people in poor countries will starve to death instead of having income? Nice.

Way to put words in my mouth :rolleyes:

[Kludge]

Dunno if Kr. was being sarcastic or not, but the situation in China re: sweatshops is pretty fucked up.

Families are told by gov't & corporations their children will amount to more working in a city factory than a rural family subsistence farm. Those kids come to learn they will work and sleep in the building of a business willing to give them barely enough to feed themselves, much less their family, and even that business is at great risk of closing their doors due to how cheap labor is in the area (IOW, they have no other means to compete -- they can't lower wages, and nothing else matters to companies like Walmart's manufacturers). What's the solution? I have no idea - but putting greater legal restrictions on Walmart which allows these kids to give back to their "overpopulated" families on little land is likely better opportunity than they'd otherwise have.

Sweatshops are terrible, but that doesn't mean it isn't the best hope for some people.

- And didn't I make a thread about this story months ago? http://www.ronpaulforums.com/showthread.php?275164-Amazon-Plays-Hardball-With-IL-Over-New-Sales-Tax-Law

[Andrew-Austin]

Since when does Amazon know anything about constitutionality?

I believe they sell books on the subject, actually.

[Kregisen]

Way to put words in my mouth :rolleyes:

What else would you mean by implying that capitalism isn't fair?