Posted on 01/06/2011 4:30:39 PM PST by mlizzy
Greetings from the Amazon Associates Program: We regret to inform you that the Illinois state legislature has passed an unconstitutional tax collection scheme that, if signed by Governor Quinn, would leave Amazon.com little choice but to end its relationships with Illinois-based Associates. You are receiving this email because our records indicate that you are a resident of Illinois. If our records are incorrect, you can manage the details of your Associates account here.
Please note that this not an immediate termination notice and you are still a valued participant in the Amazon Associates Program. But if the governor signs this bill, we will need to terminate the participation of all Illinois residents in the Associates Program. After that point, we will no longer pay any advertising fees for sales referred to amazon.com, endless.com and smallparts.com nor will we accept new applications for the Associates Program from Illinois residents.
The unfortunate consequences of this legislation on Illinois residents like you were explained to the legislature, including Senate and House leadership, as well as to the governor's staff.
Over a dozen other states have considered essentially identical legislation but have rejected these proposals largely because of the adverse impact on their states' residents.
Governor Quinn's office may be reached here.
We thank you for being part of the Amazon Associates Program, and wish you continued success in the future.
Sincerely,
Amazon.com
Didn’t Harold Washington have nice things to say about Quinn? /s
Gotta love it.
/johnny
Another unconstitutional money grab. Illinois is trying to redefine what constitutes a “nexus” to force Amazon to remit sales tax to them even though it has NO physical presence in the state.
They claim that since Illinois residents take advantage of Amazon advertising on their web pages or blogs that it meets their redefined “nexus”.
It simply requires Amazon to collect sales tax on Illinois resident's purchases -- a feature Amazon already has implemented, and uses whenever one of it's partner businesses like Target.com sell to illinois residents.
Amazon is simply afraid that, if it has to collect sales tax, it will lose business to local companies who it is now beating because it can undercut their prices by not collecting the sales tax.
Note that in Illinois, people who buy from Amazon, because Amazon doesn't collect the sales tax, are required by state law to keep track of those purchases, and file and pay their sales tax themselves.
SO the only way people of Illinois would do worse if the bill passes, is if they are tax cheats.
Here is the law in Illinois: Illinois Sale and Use Tax:
If the seller (typically an out-of-state business, such as a catalog company or a retailer making sales on the Internet) does not charge Illinois Sales Tax, the purchaser must pay the tax directly to the department.
This is not the 1990s. Amazon already collects sales taxes for all sales in some states, and for all states where they are fulfilling sales from businesses that have local presence. It costs them nothing to collect and reimburse sales tax to the state. It helps the law-abiding citizens of Illinois, and only inconveniences the law-breakers.
But Amazon wants to stir up people against these laws, because they can make more money by getting what is a defacto taxpayer-funded subsidy to undercut the prices of goods sold at Illinois stores that employ illinois residents and serve in their communities.
That is a question for the courts. Amazon obviously fears that Illinois is correct, and the courts will agree with them, or else it wouldn’t threaten it’s business partners.
I currently have six sites promoting Amazon products. I will absolutely pack my things and move to Wisconsin!!!
The courts already decided this once regarding mail order catalogs, the states lost; a nexus has to be physical, a store or warehouse, not a catalog sent through the mail.
The internet is a new form of “mail” order and Illinois is trying to claim that its residents use of Amazon affiliate sales via blog ads constitutes a valid nexus is utter crap.
In the mean time, Amazon is putting pressure on legislatures and governors via their voters, by dumping them from their affiliates program. It’s a smart move.
It’s smart if you think Amazon doesn’t get money from the affiliates program. In which case you’d have to ask why they run an affiliates program.
And it won’t make sense if every state does the same thing.
The answer is a national law setting a reasonable standard to require significant internet sellers to collect state sales taxes.
And continue to feed the beast of government spending???
Nope. There is already a reasonable standard for collection of state sales taxes, it’s called physical nexus.
Sales tax is not a tax on the companies selling you things. Its a tax your state imposes on you for buying things.
Collection just makes is harder for people to cheat on their taxes. We aren’t arguing over Amazon having to pay taxes, we are arguing about a state helping citizens who want to follow the law (keeping track of your own purchases is work), and ensuring that those citizens don’t have to pay more taxes to make up for the tax cheats who don’t pay the taxes they legally owe.
I posted the relevant section of Illinois tax code, to show that the citizens of illinois are required by law to pay tax on their Amazon purchases. The state has that right, because they can tax their own residents.
The only question is whether the state can get Amazon to collect the tax for them.
It is sad that so many citizens won’t pay the taxes they owe unless they think they will get caught breaking the law.
Sadder that so many conservatives are happy and brag about being tax cheats. We lampooned and attacked people like Tim Geithner for cheating on his taxes — we shouldn’t be encouraging others to cheat.
We currently have six sites promoting Amazon products. I will absolutely pack my things and move to Wisconsin!!!We have a few sites promoting Amazon products as well, however, I'm not too slick on figuring out what people want to purchase, etc., so we really don't make too much from their products, but I like having them available on our sites. We were thinking Canada, not Wisconsin. :)
This is the most ridiculous thing I’ve ever heard of in my life.
The State of Washington, which has a sales tax, doesn’t charge sales tax on items bought by folks who live out of state. Illinois is trying to force Washington State-based Amazon to do something not legally required by this state.
I live in southwest Washington. When I buy anything from Amazon or from Starbucks Coffee (another Washington State-based business), I’m required to pay state sales tax. If Illinois began requiring me to pay sales tax to them, I wouldn’t buy anything from any Illinois-based business.
Illinois is stepping on its own crank!
No. Amazon is not required, by the laws of the State of Washington, to collect taxes for Illinois.
Illinois can go pound sand. The sales tax is between the State of Illinois and its own citizens.
Suspend taking orders from IL addresses. THAT will get people’s attention.
Thats right, the citizens of Illinois owe a tax and the state of Illinois has the power to tax them.
The state of Illinois does NOT have the power to make me their tax collector because I am not a resident of Illinois, nor do have a physical nexus in that state.
Neither does Amazon and the state of Illinois has no power over them either. It is unconstitutional and has already been adjudicated by the USSC. Illinois wants a do-over claiming affiliate advertising is tantamount to a physical nexus. They’re full of it. It’s a power grab.
It’s also not my job or Amazon’s job to do your bookkeeping for you. Your fellow tax cheats are also your problem.
BTW, I live in one of the five sales tax free states. No cheating here.
Illinois would not require you, a Washington resident, to pay sales tax on items purchased from Illinois.
Instead, Washington State requires you to pay sales tax on items you buy from companies in Illinois. HOW that happens depends on the nature of the company in Illinois.
If the company in illinois also had any business interest at all in Washington, Washington state can ask them to collect the sales tax from you, and send it to them . That is the easiest for you, because you just give the Illinois company the money, and don't have to worry about it again.
If the company in illinois has NO BUSINESS in Washington, then Washington requires YOU to pay the tax directly. They have an online service for that, or you can print out a form, fill it out, and send in your money.
Any time you make a purchase out of state where they company does NOT collect sales tax, you have to do it yourself. Here is the relevant Washington State tax information for Washington State Use Tax:
Use tax is due if:The information on how to pay the tax is on that web page as well.
- Goods are purchased in another state that does not have a sales tax or a state with a sales tax lower than Washington’s. For example, items you purchase in Oregon that are used in Washington are subject to use tax.
- Goods are purchased from someone who is not authorized to collect sales tax. For example, purchases of furniture from an individual through a newspaper classified ad or a purchase of artwork from an individual collector.
- Goods are purchased out of state by subscription, through the Internet, or from a mail order catalog company. Many of these companies collect Washington’s sales tax, but if the company from which you order does not, you owe the use tax.
- Personal property is acquired with the purchase of real property.
Assuming you want to pay the taxes that you legally owe, which would you rather do, have a company collect the tax from you when you buy something, or have to go to a separate website and fill out a form, and send a separate check or make separate payment for your purchase?
Now, lets for a moment forget about how just about every state has a similar requirement for it's residents. You, and someone who lives just over the border in Oregon, each purchase a $1000 TV from amazon. You, happening to live in a state where Amazon does business, have your sales tax collected by Amazon, at least 6.5% (I don't know your local number). So you had to pay an extra $65 on your purchase.
The guy in Oregon pays no sales tax. He got the TV $65 cheaper than you did.
Another guy who lives next store to the Oregon guy decides to buy the SAME TV from Walmart, who is also selling it for $1000. That person pays Oregon sales tax on the purchase, meaning he paid more than the guy who ordered from Amazon.
Now, if everybody follows the law, the guy in Oregon who bought from Amazon will fill out his use tax form and pay his sales tax. But if he is a tax cheat, he gets rewarded.
In 1994, the Supreme Court ruled that it was too hard for a company with no business in a state to figure out all the sales taxes around the country. That is no longer the case -- Amazon already has the ability to do so, for the times when it sells things from it's partners like Toys R Us or Amazon (you might not notice this because you pay tax on everything from Amazon, but for most of us we see the sales tax pop up when these purchases are made).
BTW, if I go online and order something from Starbucks, they collect sales tax from me -- because there are Starbucks locations in my state. Starbucks knows how to collect the right sales tax for most locations in the country, as do Borders, Walmart, Target, and Barnes and Noble.
Those online companies are all at a competitive disadvantage to Amazon, because they do business in states around the country, while Amazon has structured it's entire business to AVOID doing business in states around the country. It is part of their business plan to help people cheat on their taxes.
If it is an ironclad certainty that you are correct, why would Amazon cancel a program that makes it money? Apparently, Amazon believes that there is a possibility that the Illinois law will be upheld by the courts.
In fact, it is likely that Amazon is worried that the courts might even backpedal on their earlier rulings, which in part were based on the difficulty of tracking sales tax information state by state, a difficulty that is pretty much gone with the advent of modern computing and networking.
Amazon seems focused on making sure that no court case gets filed on this matter. That’s not the position of a company that is sure it would win on the merits.
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