business news in context, analysis with attitude

Crain’s Chicago Business reports that Illinois Gov. Pat Quinn has signed into law a bill “designed to make it easier to collect taxes from sales on the Internet, outraging Chicago's Web retailing community but pleasing conventional brick-and-mortar stores. Enacted into law was a measure requiring any non-Illinois seller to collect the state's sales tax if that seller acquires their customer via a link on the website of an Illinois firm.”

According to the story, “the bill was widely dubbed the ‘Amazon tax,’ in honor of the big Web retailer that has avoided paying much Illinois sales tax because it lacks a physical presence, or nexus, in the state.” The Illinois Retail Merchants Assn. released a statement saying that “the bill merely will take away Amazon's unethical advantage”

Almost immediately, Amazon reacted.

Bloomberg reports that Amazon is immediately severing its ties with all its Illinois affiliates, which are websites that send customers to Amazon through links.

“We had opposed this new tax law because it is unconstitutional and counterproductive,” Amazon said. “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.”
KC's View:
I cannot help but feel that at some point, Amazon is going to have to bite this bullet.