Amazon Terminates Illinois Affiliates

I just received my termination email.<p>I believe I have a whopping $4 owed to me at this point, so I'm not upset about losing a large amount of revenue; I just have a difficult time understanding the rationale here.<p>I'm an affiliate: I direct traffic to Amazon, nothing more. Or put another way, I'm a third-party marketing arm; I don't participate in purchases as either buyer or seller. But apparently, I'm involved enough to constitute a physical presence for Amazon in Illinois?<p>If I apply this same logic to out-of-state companies contracting with marketing firms here in Illinois to promote their brand here and elsewhere, I get even more confused about the message being sent.<p>Perhaps it's best if I don't think about it very hard.

Amazon in France pays sales tax, just like everybody. Sales tax in France is 20% (19,6% to be precise). Is that a problem for Amazon in France? It doesn't seem so.<p>I can't find a justification why online retailers should be exempt from sales tax; the reason invoked by Amazon US is that sales tax are a local tax, at the state level, and they happen to be located in a different state (they're always in a different state).<p>This reasoning is preposterous; the sales happens where the customer is, and that's where the tax is due. That's what will happen eventually; they are just buying time -- and not very elegantly.

For a couple years now, New York State has gotten away with forcing Amazon to charge sales tax via a similar state law regarding affiliates, does anyone know why amazon implemented the sales tax instead of dropping affiliates in that case?

If an affiliate in Illinois constitutes a presence for Amazon in Illinois, what happens when Amazon Adsense Ads appear on a web site hosted out of Illinois but run by a blogger who is a resident of Illinois? By my reckoning, Amazon is paying Google who in turn pay a resident of Illinois. How is this different from an Amazon affiliate?

The so-called 'Amazon law' is in 4 states now: New York, Rhode Island, North Carolina and now Illinois.<p>There are a number of states considering it, though, including California.

Ethics aside, this seems extremely shortsighted on the part of the legislature. Amazon might compete strongly with local big boxes ("Main Street", my foot), but how much shipping business (and resulting jobs and tax revenue) is ultimately created by Amazon's sales in IL?

How many states does it take Amazon to lose until they change their policies? Yes I understand the legalities of it — but there is something very strange about the fact that if I buy a 99 cent app from Apple they can collect the extra sales tax but if I purchased a $99 physical item from Amazon that they feel it's too hard.<p>As an affiliate here in NY I run a small side biz that generates a great deal of revenue from Amazon and I hate where this thing is going (what kills me is that it's a decent source of income — but not enough to pack up my bags and get a new address).

If you are interested in doing something about this, I'd recommend you check out the Performance Marketing Association (<a href="http://www.performancemarketingassociation.com/" rel="nofollow">http://www.performancemarketingassociation.com/</a>). One of their main focuses is addressing affiliate nexus legislation and they have representation from most major affiliate networks and several large merchants.

It is sort of alarming to see users here demanding more taxation at the state and federal level.<p>Amazon has been around for awhile. Why is this a problem now?

It's time for the Congress to get involved here.<p>Pass a law that each state can specify a single tax rate for any shipments into that state. Then all retailers everywhere would have to collect that tax and pass it on to the state.<p>If the state wants to distribute the money locally let them handle it themself - the retailer sends a summary with the city names, and total amount, and the state can figure out how to distribute it.<p>I'm a fan of taxing via sales tax instead of income tax.

I think part of the nightmare for an internet company is dealing with the myriad of tax laws--not at the state level, but at the county/city level. Sometimes some cities for example declare tax holidays on certain goods. How do you deal with that regularly? Perhaps a company of Amazon's size could, but suppose you are just a small company? If you are local, then you're aware of such things, if you're not...

As much as I'd hate to lose thousands of dollars every month, if Amazon were to terminate their program in Ontario for the same reasons, I'd fully understand them. I imagine that the extra income generated by affiliates would pretty much be lost due to the sales tax, and Amazon is a business, not a charity organization.

I wonder if the states realize that one of the possible outcomes involves Amazon retreating to only a few states-<p><i>which then elect to allow the practice to keep the entirety of Amazon's revenue flowing through their borders</i><p>It's not necessarily inevitable that the states will be able to muscle Amazon to their wishes.

I don't suppose having your LLC based out of state is going to save you here is it?

I don't see the point in punishing the affiliates or how the tax law makes any difference in how the affiliates get paid for generating sales.

Are there many states left that Amazon <i>does</i> allow affiliates from?