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Gov. Pat Quinn (D, IL) about to destroy IL Amazon affliliates?

It’s certainly looking that way: the Democrat-run (Democrat-dominated) state legislature has just passed a bill to tax online purchases (via Points and Figures, via Instapundit): the bill is just waiting for Governor Pat Quinn’s (D) signature, which is almost certainly inevitable.  In fact, the state of Illinois is going to raise taxes across the board – because that’s what Democrats do.  Business is good; raise taxes.  Business is bad; raise taxes.  Business is in a surreal zone where it’s actually a peanut butter sandwich; raise taxes on jelly and mandate jelly’s inclusion in all corporate endeavors.

And, just as inevitable as the sunrise, comes the first report that Amazon.com will end their Illinois Amazon Affiliate program in response.  That first link is generally grim reading for Illinois residents: not only does it indicate that the big online retailers are apparently still perfectly willing to drop their affiliate programs in large states, but the smaller online retailers that depend on companies like Overstock and Amazon for their business are well aware that they can do their business in, say, Ohio.  Translation: Illinois Democrats are about to damage their business tax base in the course of (unsuccessfully) trying to raise its business tax revenue.

“Business” as usual, in other words.

Moe Lane (crosspost)

PS: At this point we usually hear from the people who want to ‘yes-but’ along the lines of “Yes, but the state of Illinois has a right to those sales taxes.”  Indeed, the state of Illinois has the ‘right’ to raise and levy taxes on in-state purchases.  No matter how burdensome and archaic that might be when it comes to online purchases; and no matter that it might be wiser to consider that possibly the fact that people shop online to avoid state sales tax implies that state sales taxes are generally too high.  Wiser… but not politically safe; Democratic politicians prefer that government revenue be high, even when it’s at private revenue’s expense.  That hypothetical sales tax money wouldn’t be going towards business-friendly programs, after all: it’d be largely going towards government entitlement programs, which are notoriously unprofitable*.

But then, having groups like Amazon pull out of Illinois would be a win, for a certain class of smug types: after all, they showed those corporations who the boss was! – And, really, they don’t actually care about anything else.

*And this would be the point where other people start waxing rhapsodic (and slightly mechanically) about the dubious virtues of widely inefficient government ‘relief’ programs ‘helping’ demographic groups whom said other people generally would only associate with if you put a gun to their heads.

PPS: Just in case it wasn’t exceptionally obvious already; I am an Amazon.com Associate (not based in Illinois, though).

COMMENTS

  • earlgrey

    I guess with so many pals in the White House they see no reason to worry.

  • Brian Hibbert

    So the Democrats got around that by calling it the “Retailers Occupation Tax” and still tax the hell out of us.

    They’re also going to raise income taxes and cigarette taxes and probably a few thousand other taxes. All in the lame duck session.

    I’ve been preaching against tax increases that drive business out of state, but these morons just don’t understand what I mean. One even commented that he’s going to buy his cigarette out of state while laughing at me on another thread for suggesting that higher rates can decrease revenues.

    Illinois Democrats suck.

  • barry915barry

    State income tax from 3.0%>>5.25%.

    And $1.00 per pack on Cigs.

    Although they do say that the income tax increase is temporary and will graduate back down to 3.75% after 4 years.

    Don’g forget about the additional 12 BILLION in borrowing to help pay the debt. All the revenue will go towards property tax relief (suburbs excluded specifically that have the tax cap in place), and for education…………read, fill the union coffers. Barry

  • rocketeer

    I’m paying 7% and up on each purchase, and it’s always been called a sales tax. How is this unconstitutional?

  • rocketeer

    Last week we got a newspaper article about Illinois offering a tax amnesty. Pay up your sales taxes on your online purchases and you won’t be penalized.

    The article didn’t say “on your purchases from businesses with Illinois “brick and mortar presence”. I’m left that Illinois wants something from any online purchase by a resident.

    I’m under the, likely misinformed, impression that there is still a law, or some sort of federal compact, that exempts out-of-state online purchases from local taxes. Does anyone know more authoritatively?

  • NeoKong

    They got what they voted for.

  • romeg

    They are only trying to be FAIR aren’t they? Should these evil, wicked, mean and nasty Click and Order business pay their “FAIR SHARE” just like the Brick and Mortar businesses do?

  • Joshua Persons

    The US Constitution gives the right to regulate interstate commerce to the US Congress, meaning that the states can’t mandate that a seller collect sales tax if the seller doesn’t have a significant presence in the state. Congress could pass a law dealing with this supposed loophole, but they’ve never bothered. Instead, the state of Illinois (and many others) has a law stating that a state resident purchasing goods from an out-of-state seller has the obligation to pay a “use tax” equivalent to the sales tax which would have been applied to the purchase.

  • vamoose

    Illinois loses another congressional seat after the 2020 census.

  • citizenjerry

    The tax-happy leftists who run the Colorado government did the same thing and Amazon pulled out, leaving a lot of independent online business owners out of work. So … the voters elected a new governor who will continue to do the same.

    There’s a lot of sense in the adage we get the government we deserve.

  • Brian Hibbert

    Or if you buy something out of state, you pay a “use” tax.

    Yes, they’re really sales taxes, but by changing the names the politicians got around the restrictions. Funny how that works isn’t it?

  • Brian Hibbert

    And unicorns are real too.

    The people who DIDN’T vote for Bill Brady should have the pay this entire tax. 8*(

  • barry915barry

    *Primary, General. Barry.

  • Brian Hibbert

    under a lame duck session. I’m going to Springfield next Wednesday to watch a good man get sworn into my house district, but the loser he’s replacing voted YES on this monstrosity.

    Unfortunately, there’s still going to be a majority of Dems and a Dem governor running this state. The ILGOP is partly to blame for this given the number of unopposed Dems in the last election. We GAVE them something like 26 seats.

  • bgintn

    Amazon to open two new places in Southeast TN. Sites already approved and being built. There loss.

  • bgintn

    Not “There loss”, but Their loss

  • http://teapartisan.wordpress.com Socrates

    In Illinois, Republicans lost the governorship by 20,000 votes. That is less than the number of non-voting Republicans in any of several Illinois counties — Madison, St Clair, Lake, DuPage, Will, and certainly Cook.

    More than that, though almost all of the roughly 100 smaller counties in Illinois went Republican, we smaller counties failed to get our voters to the polls.

    If we had had a viable, statewide GOTV campaign to alert Republican voters to the urgency of the election, and had the focus been on maximizing the winning margin rather than on doing just enough to win, we would have won the governorship and been talking about spending cuts, not tax increases.

    We had tons of money spent on commercials touting the candidates, and even more bashing opponents. We even had a telemarketing operation. But how much was devoted to knocking on doors? That was left to volunteers and tea partiers.

    And so, Quinn is doing as he campaigned. If he doesn’t, he won’t get any Obama money to bail out the state.

  • msctex

    “For every action, there is an equal and opposite reaction.”

    In order to be a Progressive/Liberal, one must forego any acknowledgement of the above. Things just happen, we live in chaos, and there is no way to predict that a 75% tax increase of any kind might have dire consequences.

  • The_Gadfly

    It’s not a law per se. I don’t recall the exact SCOTUS decision, but it dealt with catalog sales way back in the dark ages. SCOTUS held that it is unconstitutional for one state to dragoon another state’s residents into their tax collection corps. So unless there is a brick and mortar presence in the state (brick and mortar store would need to comply regardless of the number of stores, so it is no extra burden to collect the tax for all sales in the state) the catalog sales agency doesn’t have to collect the tax. Recent decisions have extended that to online sales because they work just like a catalog. So the SCOTUS case never relieved the citizens of the burden to pay the taxes, only that the sales agent doesn’t have to collect them. Granted this has effectively relieved citizens of the necessity of paying those taxes, because it becomes impossible for the state to enforce the collection.

  • earlgrey
  • The_Gadfly

    Now, what could get interesting here is if they try to collect those “Retailers Occupation Tax” from the individual citizens given Brian Hibbert’s posts. While they are clearly an end run around the intention of the IL constitution, they are technically defensible in a court of law because the sales people are retailers. But in the case of the citizen who bought the item online, he is clearly not a retailer. An enterprising free enterprise group might be able to back a legal challenge to the tax collection and I don’t see anyway an honest court could get around declaring those collections unconstitutional. Of course, I don’t know whether or not IL Dems have managed to pack the court with their minions.

  • The_Gadfly

    as other posters here have clearly indicated (I was going to reference Drudge, but see no need given their posts), the IL Dems haven’t singled out the Amazon affiliates. They’ve declared a tax war on everybody in IL who isn’t a protected class.

  • Joshua Persons

    The pertinent Illinois state law regarding use tax is 35 ILCS 105.

    I read up on all this a few weeks back, when Illinois started touting its “use tax amnesty”. I was just trying to give the general gist of use tax. “Significant presence” can actually be somewhat smaller than a brick and mortar store — a single salesman dedicated to and working in the state may count.

  • http://www.flaliberty.org scorpio0679

    If California were the only “failed state” then the liberals would argue that it was an outlier; a fluke. With California and Illinois both heading toward failed state status, that argument becomes much more difficult. Now, imagine that California, Illinois, and New York all become failed states under liberal leadership . . . and then New Jersey pulls itself back from the brink.

    Only a completely delusional denier of truth and reality could then argue that somehow it was all bad luck. So I guess that means that we’d still hear the same old memes from the liberals!

  • victrola

    I fee bad for Illinois residents, but make no mistake, this is what they voted for. It seems like whenever we warn people about what Liberals are capable of they think it’s all just over the top rhetoric.

    In a sick sort of way, I’m glad Democrats won in California and Illinois. These states are near collapse because they’re liberal, blue states that have been governed by socialists. No Republican/RINO Governor was going to fix it (or could), they need to hot rock bottom before they get better. All they would get is blame (see Schwarzeneggar for an example)

  • The_Gadfly

    as does my Kowalski. If the court finds the “use” and “retail occupancy” taxes are subterfuges to subvert the unconstitutional “sales” tax, the whole lot collapses.

    And the SCOTUS case is specific about physical presence in the state in order to require the sales agent to collect it. Essentially, if the vendor would otherwise be responsible for collecting the tax in one part of the state, they are responsible for collecting it in all parts of the state. But if they otherwise have no responsibility for collecting the tax, they cannot be forced to collect it. A salesman who resides in the next state and has his office there but runs his route in your state can’t be forced to collect it.

  • earlgrey

    others doubled down on stupid. Maybe there was just too much tea party fever going on and it freaked people out, but IL and CA decided to stay the course. I am intersted in the psychology behind it.

    I’d like for the mushy middle to get better informed about what is happening in iL and CA and to understand why.

  • redneck_hippie

    to implement their 75% tax increase. Quick, someone lock the doors to the capitol. They only have until the end of this week, before the newly elected lawmakers take over.

  • jiminga

    the cigarette tax revenue actually fell because people just hopped over to NJ to buy them there.

  • jiminga

    and Amazon, Overstock, etc. dropped their affiliates. I wonder if there are actually any democrats that even have business experience, or know someone who does?

  • http://www.incredibleco.ning.com Incredible

    I found a way to move out of Illinois in my 20′s. If you can’t see how stupid a state it is and start tugging on your own boot-straps, you deserve it.

    *Moe-Lane-style PS: Yes, I have deep (pre-civil war, Jesse James camped on family property once) roots in IL. Even my wife’s family originally immigrated to IL. Now we have Skype and planes and highways if we need to go back. There’s no excuse for the majority to stay.

  • http://www.incredibleco.ning.com Incredible

    I found a way to move out of Illinois in my 20′s. If you can’t see how stupid a state it is and start tugging on your own boot-straps, you deserve it.

    *Moe-Lane-style PS: Yes, I have deep (pre-civil war, Jesse James camped on family property once) roots in IL. Even my wife’s family originally immigrated to IL. Now we have Skype and planes and highways if we need to go back. There’s no excuse for the majority to stay.

  • barry915barry
  • melbedewy

    now let them reap the whirlwind.
    What’s the sales tax in Chicago up to now-15%?

  • neomom

    with North Carolina as well

  • oneconservative

    I think one seat is a given; it may be two…

  • oneconservative

    I am looking to leave the state. Where do you suggest?

  • oneconservative

    You are sadly mistaken. It is only 11% although there are some things that are taxed extra high on top of the already high tax. There is a bottled water tax and I think some sort of aluminum tax (I may be wrong at that). I bought a 99 cent can of Arizona ice tea at a Walgreen’s in downtown Chicago a few months ago and the walk out price was something like $1.13.

  • GregInFla

    and Indy is a red state with Daniels at the helm. I like that. Mike McConnell on WGN radio talked about the income tax increase yesterday with a GOP state senator. He was surprised there was not more outrage. Some libs are complaining that more spending is not linked to the increased income tax. Illinois’ state income tax rate is a flat rate, and the tax increase would take a $1000 tax bill to $1700. Ugh!

  • The_Gadfly

    Which I never understood because aluminum is one of the more sought after recycling metals. When I was a young lad and in the Cub Scouts, aluminum cans were like gold on recycling – 50 pounds of aluminum got you more than 500 pounds of newspaper.