Taxing the Internet

I just found out today while skimming some articles, that the U.S. Senate has agreed to go forward on the "Marketplace Fairness Act of 2013". This is a bill that, if passed, would force retailers to collect local and state sales tax on all purchases made over the Internet. Don't buy into the notion that this has anything to do with fairness, because it doesn't. Those small "mom & pop" stores who can't compete against the likes of Amazon or Wal-Mart have long since ceased to exist. No, this is all about money and big corporations like Amazon and Wal-Mart trying to further squeeze the smaller businesses this Internet taxation is supposed to help. Local businesses that are still around have thrived in part because of the Internet. State governments are chawing at the bit for this because they don't know how to cut spending and balance their budgets and anything they can do to get more money in their pockets, they will. If you read the articles about this, they'll talk about a theoritical $23 billion that states are losing because of the loss of sales tax because of the Internet. Notice the key word there: "theoretical." If people end up having to pay more to buy products off the Internet, they aren't going to shop there as much. People, unlike our federal and many of our state governments, have to cut spending when the price of goods goes up. There isn't going to be any major boon to state governments because of this. Don't buy into the lies, the truth is out there.

Amazon.com to Cut Ties With the Citizens of Illinois

Thanks to the boneheaded state government (which is supposed to be in a "lame duck" session), Amazon.com is going to eliminate all of its Amazon Associates who live in Illinois. For those who don't know, the Amazon Associates program is a program that Amazon has that allows people to place links for Amazon on their websites. If someone goes to Amazon through a link on an Associates site and purchases something at Amazon, the Associate gets a small fee (usually one or two cents). Lawmakers in Illinois have voted for a 6.25% tax on online retail purchases. The levy, which still needs the governor's approval, would apply to goods bought through affiliates of online retailers that take in least $10,000 worth of annual sales in the state. To avoid the hassle of dealing with 9,000 affiliates who live in the state Amazon has decided to terminate all Amazon Associate accounts in Illinois. Amazon is just the first company to do so and Overstock.com has announced they will follow suit and several other large online retailers are planning the same.

Here is a copy of the email I received today:

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.

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.con

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There's a chance that the legislation can be stopped, but only if the governor doesn't sign the legislation. Contact Governor Quinn's office here and ask him not to sign the bill.