Will Politicians Ever “Get It”?

A little over two months ago, I wrote a post about the huge mistake Illinois politicians were about to make regarding affiliate marketing.

You can read about it here.

Unfortunately, as expected, petitions, letters, phone calls and emails from thousands of small business people fell on deaf (and dumb?) ears.

This afternoon, I received this email from our new Governor:

Dear Steve,

Today I have signed House Bill 3659, which requires all companies doing business in Illinois to collect and remit legally required sales taxes.

House Bill 3659, The Main Street Fairness Bill, was a bipartisan initiative that passed both houses of the General Assembly with overwhelming support. This law will require all online retailers who connect with an affiliate in Illinois to collect sales tax on customer purchases and remit it to the Illinois Department of Revenue (IDOR). Illinois currently collects sales tax revenue from the more than 20,000 retailers with physical locations in the state, including online and catalog sales from these vendors.

Illinois’ main street businesses are critical to ensuring our long-term economic stability, which is why they must be able to compete with every company doing business online in Illinois. This law will put Illinois-based businesses on a level playing field, protect and create jobs and help us continue to grow in the global marketplace.

Per my request, the Alliance of Main Street Fairness (AMSF) has begun a website (www.standwithmainstreet.com) to help Illinois affiliates expand their customer bases. The Illinois Department of Commerce and Economic Opportunity (DCEO) will partner with the Illinois Retail Merchants Association and AMSF to provide growth opportunities, foster an environment to create more Illinois jobs and provide online shopping consumers with greater opportunities to save money.

Thank you for reaching out to me on this matter. Please feel free to contact me in the future with your questions. My office phone number is (217) 782-0244 or (312) 914-2121.

Sincerely,
Pat Quinn

Pat Quinn
Governor

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Less than two hours later, I received this email from Amazon.com:

Hello,

For well over a decade, the Amazon Associates Program has worked with thousands of Illinois residents. Unfortunately, a new state tax law signed by Governor Quinn compels us to terminate this program for Illinois-based participants. It specifically imposes the collection of taxes from consumers on sales by online retailers – including but not limited to those referred by Illinois-based affiliates like you – even if those retailers have no physical presence in the state.

We had opposed this new tax law because it is unconstitutional and counterproductive. It was supported by national retailing chains, most of which are based outside Illinois, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that its enactment forces this action.

As a result of the new law, contracts with all Illinois affiliates of the Amazon Associates Program will be terminated and those Illinois residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, or SmallParts.com. Please be assured that all qualifying advertising fees earned prior to April 15, 2011 will be processed and paid in full in accordance with the regular payment schedule. Based on your account closure date of April 15, 2011, any final payments will be paid by July 1, 2011.

You are receiving this email because our records indicate that you are a resident of Illinois. If you are not currently a permanent resident of Illinois, or if you are relocating to another state in the near future, you can manage the details of your Associates account here. And if you relocate to another state after April 15, please contact us for reinstatement into the Amazon Associates Program.

To be clear, this development will only impact our ability to continue the Associates Program in Illinois, and will not affect the ability of Illinois residents to purchase online at www.amazon.com from Amazon’s retail business.

We have enjoyed working with you and other Illinois-based participants in the Amazon Associates Program and, if this situation is rectified, would very much welcome the opportunity to re-open our Associates Program to Illinois residents.

Regards,

The Amazon Associates Team

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Which side do you believe will prove to be right?

Will severely limiting (if not eliminating) the ability of thousands of online affiliate marketers in Illinois really “put Illinois-based businesses on a level playing field, protect and create jobs and help us continue to grow in the global marketplace”?

Or will Illinois simply suffer the same fate as other states, where “Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue.”

I’d love to see your Comment below.