Amazon kills off 9,000 affiliates in Illinois due to internet sales tax, businesses flee

When I heard that I had to start keeping track of all my online purchases because the state of Illinois was going to charge a sales tax on them, I laughed. A sales tax? On internet purchases? Nice try Blago Quinn. In fact its not just purchases from this year that Illinois wants you to report. It’s all your internet purchases since 2004. On the new IL-1040 Individual Income Tax Return forms that every Illinois citizen is required to complete and submit, we must now fill in how much we owe in “use taxes.” The 6.25% tax goes in effect immediately as Governor Quinn signed the bill yesterday. For this year the state government is offering some leniency, allowing you to “estimate” how much you’ve purchased and filing for that amount. Those who illegitimately file for $0 may face penalties and interest. Illinois is the fourth state to pass such a law. The state believes this will bring in around $6 million this year to help offset the ridiculous spending the state has done over the years.

So who does this law affect? All online retailers that don’t have a brick-and-mortar store in Illinois. This means,, B&H Photo, and more are hit by this tax. Companies like Best Buy or JC Penny remain unaffected with their online sales as they have retail locations in Illinois. Governor Quinn may soon find that the new tax may make things worse for the state’s financial situation as the money raked in from the tax will be dwarfed by the money the state will lose from fleeing business. Amazon sent out a letter to its 9,000 Illinois affiliates saying that it was terminating contracts with them as of April 15. Overstock did the same but its date of termination is May 1. Overstock’s president Jonathan Johnson says that  its affiliates in Illinois are already making plans to move to Indiana and coupled with all the affiliates Amazon is axing, many jobs suddenly are at risk.

Sources: Chicago Sun-Times, Chicago Sun-Times, Chicago Sun-Times

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