Pat Quinn vs. online consumer (services)

Illinois Governor Pat Quinn addresses attendee...
He and Roger Ebert have a good idea.

Capitalism in conflict with governmental maw in Illinois. Amazon is pulling out, as it announces by email:

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.[Italics added throughout]

We had opposed this new tax law because it is unconstitutional and counterproductive. It was supported by national retailing chains [such as Sears, see below], most of which are based outside Illinois, that seek to harm the affiliate advertising programs of their competitors. [Here is where intrusive government has its favorites — big campaign donors etc. — those who are more equal than others, to draw on Orwell.] Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. [Most such intrusions do just that.] We deeply regret that its enactment forces this action.

It does not bother committed lib and quite affluent, thank you, Roger Ebert, who blows it off:

Roger Ebert is free to tweet about Levi’s corduroy pants after April 15, but Amazon will no longer pay him if someone buys a pair.

“Amazon will terminate my Associates account on 4/15, in order to evade fair and just [!] Illinois taxes. I have 20 more days to make a fortune,” wrote the film critic on his @EbertChicago account yesterday.

Let the rest of us eat cake, eh Roger?

Not only in Illinois, of course: Inc.’s battle with state governments over sales taxes is escalating.

The online retailer on Thursday took action in Illinois, as it had threatened to do, to counter a new law aimed at forcing online retailers to collect sales taxes in the state. Hawaii, North Carolina and Rhode Island have enacted similar laws, and California is weighing action. Amazon is also in a court battle with New York over such legislation.

The Illinois law, signed by Gov. Pat Quinn Thursday, requires online retailers that work with affiliates in the state to collect sales taxes on purchases made by Illinois residents and businesses. Amazon responded to the measure by cutting ties to its Illinois-based affiliates, which are blogs and other websites that refer traffic to Amazon’s website and get paid commissions if customers make purchases there.

Sears loves it too:

The draconian so-called E-Fairness Bill signed into law by Illinois Governor Pat Quinn, was being drooled over by Sears Holdings Corporation (Nasdaq:SHLD), as they backed the proposal for companies like (NASDAQ:AMZN) to be forced to collect taxes even though they have no physical presence in the state.

Sears said this in a press release: “Sears Holdings Corporation (Nasdaq:SHLD) one of Illinois’ oldest retailers, applauds Governor Pat Quinn’s approval of House Bill 3659, which will restore long overdue fairness to the tax system for retailers and taxpayers in Illinois. The “E-fairness Law” helps to correct a longstanding problem of out-of-state businesses not collecting and remitting the sales tax in Illinois, a practice that has put brick-and-mortar retailers at an unfair competitive disadvantage for far too long.

The consumer?  Who cares about her?  Gummint wants the money.  Doesn’t always pay to build a better mousetrap.

Later: Oops, the WSJ article cited above also has this, which takes consumer benefit out of the equation:


The Amazon action has little impact on Illinois consumers. They can continue to buy directly from the company as well as pass through affiliate websites to reach its website, without Amazon collecting sales tax. But Amazon’s payments to those websites will be halted.

The 9,000 affiliates generated $611 million in advertising revenue and $18 million in tax revenue in 2009, said Rebecca Madigan, director of an affiliate trade group called the Performance Marketing Association, who estimates  the state will lose 25% to 30% of that tax revenue because the affiliates will lose business, cut jobs or move out of the state.

In other words, helping Sears means hurting someone else.  That’s gummint for you, mucking around in the market place.