Illinois State Legislature Screws Affiliates With Their Unconsitutional Tax Scam

So today I received an email from Amazon stating they are going to terminate relationship with Illinois affiliates because of this tax scam the Illinois state legislature has passed. The way I see it the Illinois law makers are giving affiliates the middle finger. Amazon did that with other states that passed this law and rightfully so.

Here is the email:

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

This tax law is absurd! We need to fight back! This is NOT going to get the state any extra money.

Here is what’s going to happen:

1. The online retailers drop their illinois affiliates so no sales tax will be gained at all

2. Illinois is going to lose money because the affiliates will lose their income they are currently earning with merchants like Amazon, Overstock, and more

3. Affiliates earning a substantial income with those merchants will now move to a different state leaving people working for them out of jobs!!!

So what’s the point of this law?? Makes no freaking sense at all. Is the state so desperate for money? They need to find a different solution because this is not going to work for them like they think it will. So many people will lose income they count on every month it’s ridiculous! (I wonder if they can sleep at night after passing this law?)

Are those politicians brain dead nowadays? (I was going to put an image of some monkeys here but they actually have brains :))

You should contact Governor Quinn and tell him what you think about it. You can reach his office here.

So they are trying to say that brick and mortar businesses in the state of Illinois are taking a hit because consumers are now spending more money online. SO??? Get with it then too! Set up your store and run an affiliate program like Amazon. This is 2011! I don’t remember buying anything at local stores besides clothes lol. So are we supposed to stay in the stone age because offline merchants can’t keep up with the changes? Get real!

In my opinion the tax law is a scam and rarely say that about anything.

The only thing that the state of Illinois is going to see is my middle finger when I am taking off at Midway airport 🙂  because I am moving if this law comes into effect.

Quick Update:

How to Beat the Illinois System:

Set up an LLC in Indiana! You do not need to be a resident. Get a PO Box there, get Quickbooks (For Tax Documentation Purposes) and establish yourself as an employee of your company. This way you only receive a pay check from YourBiz LLC and the actual commission based income is being made by your company. You will still have to pay income tax on your Pay Check, but the unconstitutional sales tax will not be your problem and you will be able to continue to promote Amazon products.

Maybe this won’t get passed but if Governor Pat Quinn chooses to screw us anyway, just keep in mind the solution above. It’s not Tax Evasion… You will still be paying your taxes as a resident.

I verified this solution with a few credible sources and it’s legal

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10 thoughts on “Illinois State Legislature Screws Affiliates With Their Unconsitutional Tax Scam

  1. Pawel, About a year and a half ago I got a similar letter from Amazon and CJ because Maryland was trying to pass a very similar tax on internet sales. I sent a letter to my delegate, my party leader and the speaker of the house for maryland asking them to think twice about this. I told them I fully understood their need for additional revenue and was not here to argue that fact. What I did point out was that instead of gaining revenue on internet sales, they would lose two fold: 1. Once the networks dropped us out, we would not be making any sales for them to tax and additionally the would lose the income tax on the earnings that we would no longer get. In essence it would have been a new tax that resulted in substantially a reduction in revenue for the state. I doubt that my single letter caused it, but, the state did at least vot it down that time around. So, it never hurts to send in letters. I doubt most state legislators care if we make less money or not, but when it looks like a move that would result in them losing revenue they might think twice. Good luck in Illinois!

  2. I totally agree. The state is going to lose money and have more people out of jobs if this law comes into effect. What they are doing makes absolutely no sense. They obviously have no idea how internet economy works. The cool part is that we can run our business from anywhere in the world 🙂

  3. My corp is based in Chicago but I live in Pasadena Pawel. I guess I won’t be setting up any Amazon affiliate blogs. Doesn’t Clickbank charge sales tax for sales made to customers in NY? I guess that’s a different law right?

  4. If you want to set up Amazon sites I would create an LLC in a more friendly state. NY also passed this law and they admitted that they lost revenue because of that :O I think it’s not as bad with digital goods though because the margins are big lol. I actually think about moving myself but we’ll see how this plays out.

  5. I was thinking of setting one up anyway (LLC or another S Corp). California is no joke either with their obscene taxes and fees on businesses. I’ll probably do NV or WY. Thanks.

  6. By the way Folusho, if you got corp set up in Illinois the tax on that is supposed to increase by almost 100%!! with this new law.

  7. Thats what you get for voting in Democraps. They don’t care about anyone but themselves. In my opinion, if you voted for a democrat, that’s what you get.

  8. Something similar happened here in CO with Amazon affiliates. I had a great site idea and was all ready to go when I found out that Amazon politely was saying no to Colorado residents. Darn legislators are actually standing in the way of legitimate ways for a person to make money. It’s so silly how they can mess up opportunities like this. Somehow most states manage. It’s hard to believe whatever tax scheme they need to satisfy their cut is so complicated that it warrants Amazon not wanting to deal with it. Oh wait, we’re talking about government here. I meant to say rather that if it is government then anything preposterous can be believable.

  9. Be careful. Just because you LLC in another state and are an out-of-state employee in your home state does not mean you are not required to form an entity in your home state.

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