For all the Amazon associates located in Illinois, my deep condolences on the loss of your work-at-home job and the little bit of extra cash it brought your way.
The gravy train has ground to a halt, thanks to Governor Jell-O Quinn.
He won't stand for any major company, especially one as enormous as Amazon, getting away with not paying sales tax to Illinois. Bad enough that the taxpayers don't voluntarily report their purchases and pay up. The least Amazon could do is fork over some money.
It's the same old "physical presence" notion that's been used in other states against Amazon's competitive advantage, and Amazon is responding in the same way as it has in the past.
Their affiliates who compile lists and push books as a sort-of independent contractor have been cut off at the knees. The physical presence is immediately severed and no more.
Estimates have the state of Illinois losing as much as $153 million in revenue because citizens buy on-line, but enacting new legislation won't fix the budget gap. Companies like Amazon have simply eliminated the physical presence and that meets the Supreme Court's rules for tax avoidance.
Store owners up and down Main Street Illinois are cheering, but they won't find more business coming their way. People will continue to buy from Amazon, and nothing will change.
Except that the State of Illinois will get a little bit less income tax from the former Amazon associates who will no longer be getting paid for their efforts.
How does that level the playing field, as Wal-Mart has claimed?
2 comments:
As a resident of Illinois who has been participating in the Amazon Affiliates program, I'm appalled with Amazon and applaud Governor Quinn. Our state is broke. The budget deficit is so bad that public workers have been forced to take furloughs. The main idea of your post seems to be that nothing can be done to make Amazon comply with the laws so nobody should try anyways. This kind of defeatism is something I never understood.
Governor Quinn promised during his election campaign to do everything he could - even adopt some very unpopular measures - to fix the budget. We only elected him 5 months ago and he has already done a lot. The huge debt of the state to my university, for example, has been repaid in full. We would not have seen a dime of that money if the Republican governor had been elected.
In my opinion, Amazon can stick their Affiliate program wherever they want. Finding a company that would want to promote its goods on a popular blog is very easy. Amazon is cutting off their nose to spite their ugly mug. Good riddance!
Before you rattle your saber, you'd want to know what's in your opponent's arsenal.
As long as Amazon can do business in another state, it will move on and Illinois will be none the richer. Indeed, it stands to lose more than it gains as the affiliates are put out of business.
All well and good to fix the budget deficit, but trying to affix a sales tax to a company that can easily function out-of-state makes Mr. Quinn look as if he's aiming for style over substance.
There simply are no easy solutions left. As the Irish have discovered, it's time to cut the spending because there's only so much money to be squeezed out of taxpayers who are themselves hard-pressed.
Illinois is particularly burdened by the cost of corruption. Until that expense is reduced, I don't see a day coming any time soon when the budget deficit is tackled with any force.
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