Illinois adopts “Internet Sales Tax Law”

Last week, Illinois’ governor signed into law controversial legislation requiring Internet retailers like Amazon.com and Overstock.com to collect Illinois’ 6.25% sales tax if they have affiliate sellers in the state.

Previously,, internet sellers were only compelled to collect sales taxes if they had a physixL presence in the state – e.g. stores or distribution centers.

So, Borders.com would have to collect sales taxes, but Amazon.com didn’t.

Hardly a level playing field.

But, Amazon has over 10,000 “affiliates” based in Illinois – companies that hawk their wares through Amazon. 

Now, these affiliates count like physical outlets.  So, if Amazon has a single affiliate based in the state, it is compelled by law to collect sales taxes

Amazon’s plan: terminate all affiliates located in Illinois.:

My take:

First, the law has nothing to do with level playing fields – it has all to do with tax revenues.

Given that, consider the so-called “second order effects”.  Many Amazon affiliates are likely to move out of Illinois – across the border to Indiana or Illinois – taking with them jobs and, oh yeah, corporate tax revenues.

Hmmm …

One Response to “Illinois adopts “Internet Sales Tax Law””

  1. Sales Tax Exemption » Illinois adopts “Internet Sales Tax Law” « The Homa Files Says:

    […] View original here:  Illinois adopts “Internet Sales Tax Law” « The Homa Files […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s