Update on Internet-TAX

Thought Arkansans would be interested to know what impact the "Internet Tax" our legislators passed through the Senate last week is having in other states such as Illinois. 

Illinois Governor Pat Quinn (D) signed the tax into law on Thursday.  Amazon and other online retailers wasted no time pulling out.

Call your Representatives and let them know you do not want to follow Illinois~

Here are a few stories with the details~ Pay attention Arkansas! 

From Townhall Finance~ Amazon cuts Ill. ties over sales tax collection

 "Amazon.com has made good on its threat to cut ties with Illinois affiliates because of a new law requiring the online store to collect sales taxes.

Amazon notified its Illinois partners Friday that it will stop doing business with them April 15. It calls the tax law "unconstitutional and counterproductive.

Online retailer Overstock.com said later that it also will cut ties with Illinois-based partners beginning May 1.

Gov. Pat Quinn signed legislation Thursday that requires online companies to collect sales taxes on Internet purchases if they have any affiliates based in Illinois. Affiliates are businesses that refer customers to Amazon and Overstock and receive commissions on purchases.

The sales tax always applied to Internet sales. But individuals _ not online businesses _ were responsible for paying it. Few people did.

 From Investors.com Illinois' Illogical Internet Tax

Fiscal Policy: Illinois becomes the latest state to enact a law imposing a sales tax on Internet retailers. Advertised as saving "main street" jobs, it's yet another creative way to drive them off.
Ignoring the truism that when you tax something you get less of it, Illinois Gov. Pat Quinn on Thursday signed legislation making the Land of Lincoln the latest state to enact what's dubbed the Amazon Tax. It's designed to collect state sales taxes from online companies if in-state businesses do business through websites such as Seattle-based Amazon.com.

In the past, online companies such as Amazon avoided collecting and paying state sales taxes, arguing they have no physical presence in a given state. A 1992 Supreme Court decision found that businesses had to collect sales taxes only in states in which they had a substantial physical nexus there.

Amazon has no physical presence in Illinois, but its affiliates — companies that market through Amazon — do.

Illinois now joins Hawaii, North Carolina and Rhode Island in getting around this impediment by considering affiliates as the required nexus. Amazon's in court with New York over a similar law.
According to the Tax Foundation, such taxes do not produce huge revenue streams. "Rhode Island," it says, "has seen no additional sales tax revenue from its Amazon tax, and because Amazon reacted by discontinuing its affiliate program, Rhode Islanders are earning less income and paying less income tax."

Illinois has about 9,000 such affiliates, and Rebecca Madigan, director of the Performance Marketing Association, an affiliate trade group, estimates the state will lose 25% to 30% of tax revenues collected from the affiliates themselves as they lose business, cut jobs or move out of Illinois.

"We had opposed this new law because it is unconstitutional and counterproductive," Amazon said in a letter announcing it was severing ties with its Illinois affiliates. Businesses targeted by the new tax are already packing their bags to move to friendlier tax climes.

Until Quinn's action in signing what is called the Main Street Fairness Act, those Amazon or Overstock.com affiliates didn't have to collect the state sales tax as a local store selling the same product must.

Quinn says this law "will put Illinois-based businesses on a level-playing field," putting online retailers under the same tax burden as brick-and-mortar stores.

Likelier, it will simply force businesses to flee the state and leave their brick-and-mortar offices and buildings empty.