Tuesday, January 11th, 2011...8:57 pm

Amazon and B&H Threaten To Cut Ties With IL Associates

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My week started by opening my email to find a letter from Amazon as follows:

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 morning I was greeted by a similar email from B&H Photo:

Act Now! Affiliates in Illinois in danger! Greetings from the B&H Photo &Video Affiliate 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 bhphotovideo.com little choice but to end its relationships with Illinois-based Affiliates. 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 Affiliates please advise of your change of address.
Please note that this not a termination notice and you are still a participant in the B&H Photovideo affiliate program. But if the governor signs this bill, we will need to terminate the participation of all Illinois residents in theB&H Photo affiliate program. After that point, we will no longer pay any commission for sales referred to B&H Photovideo nor will we accept new applications for the
Affiliate 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.Many other states have considered similar legislation but have rejected these proposals largely because of the undesirable impact on their states’ economy.
Governor Quinn’s office may be reached here.
(Note that there is no link in this one. My guess is this is because it didn’t copy well from the Amazon note.)
We thank you for being part of the B&H Photo Program, and wish you continued success in the future.

Sincerely,
Bhphotovideo.com

For the last two days I have been reading news articles on this new tax law so that I could understand it before I reacted to it. Here’s what I have found out:

  • Internet retailers like Amazon.com and Overstock.com would be required to charge customers in Illinois the 6.25 percent retail sales tax and hand that money over to the state if Quinn signed the bill. Right now, the state can only get sales tax from a business that has a physical presence in the state.” – Andrew Thomason, FoxIllinois.com
  • The 6.5% sales tax will only apply to companies making $10,000+ in revenue for Internet based retailers – meaning the bill doesn’t even apply to most affiliates, including me.
  • Regardless of above stated fact – Amazon, B&H (and other Internet retailers I imagine) will cut ties with ALL state affiliates to avoid paying the tax and to prove their point should it go through.
  • $150 million in sales tax is believed to be lost to online commerce in the state of IL. – Andrew Thomason, FoxIllinois.com
  • Illinois believes that by passing this state law and collecting this money it would “alleviate the state debt and avoid raising other taxes.” – MindYourDecisions.com
  • Other states including Colorado, New York, North Carolina and Rhode Island have all passed similar laws, but have not seen the large amounts of revenue they expected… prompting 12 other states to discard similar bills.” – George Wayne, InternetBits.com
  • When Colorado passed this bill, Amazon did in fact cut ties with everyone residing from that state. This leads me to believe they are ready and willing to do the same here.
  • The larger companies that this does effect, such as BradsDeals.com and FatWallet.com are making plans to move out of state and take their jobs with them should this happen. – Chicago Tribune
  • From what I can tell, the only IL residents slotted to lose their jobs over this are the ones that are associated with the Internet retail companies if the companies chose to pull out because of the bill. If they didn’t pull out and just agreed to pay the tax, everyone would keep their job.

After reviewing this information, I am only left to wonder who to write my “Please don’t do this, it’s not fair! ” letter to exactly. My Governor… or my Sponsors… ?

To be continued…

Once I figure out what to do about all of this.

3 Comments

  1. Jason says:

    This happened in Colorado last year. I wrote letters to both – silence ensued. Why?

    1. The state wants money
    2. Companies don’t want to spend any more than they have to, which results in
    3. Affiliates getting screwed out of their livelihood.

  2. CJ says:

    They sent them out a few weeks ago cutting off Connecticut now too…

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