Thursday, January 06, 2011

Illinois moves to tax online purchases, hits bloggers, small business

Internet Retailer today:
Lawmakers in Illinois have voted for a 6.25% tax on online retail purchases. The levy, which still needs the governor's approval, would apply to goods bought through affiliates of online retailers that take in least $10,000 worth of annual sales in the state.
Illinois Affiliate Tax Will Harm Small Businesses and Reduce Tax Revenue

Tax Foundation here.

Just got an email from Amazon:
Greetings from the Amazon Associates Program:

We regret to inform you that the Illinois state legislature has passed an unconstitutional tax collection scheme that, if signed by Governor Quinn, would leave Amazon.com little choice but to end its relationships with Illinois-based Associates. You are receiving this email because our records indicate that you are a resident of Illinois. If our records are incorrect, you can manage the details of your Associates account (here).

Please note that this not an immediate termination notice and you are still a valued participant in the Amazon Associates Program. But if the governor signs this bill, we will need to terminate the participation of all Illinois residents in the Associates Program. After that point, we will no longer pay any advertising fees for sales referred to amazon.com, endless.com and smallparts.com nor will we accept new applications for the Associates Program from Illinois residents.

The unfortunate consequences of this legislation on Illinois residents like you were explained to the legislature, including Senate and House leadership, as well as to the governor's staff.

Over a dozen other states have considered essentially identical legislation but have rejected these proposals largely because of the adverse impact on their states' residents.

Governor Quinn's office may be reached here.

We thank you for being part of the Amazon Associates Program, and wish you continued success in the future.

Sincerely,

Amazon.com

This is Illinois. More stuck on stupid.

More.
Dan Curry
Another Illinois boneheaded move: Levy tax on online affiliates and lose ALL taxes collected. :
By one account, Illinois has 9,000 affiliates, who earned $116 million and paid $18 million in state income tax in 2009. But now that is likely going to stop flowing into the Illinois Treasury because reailers, like Overstock.com and Amazon.com have told their affiliates they will terminate their relationships because of this bill. There may still be a chance to stop this bad bill, but only if good people like you who are concerned about Illinois speak out; click here to contact Governor Quinn and tell him taxing online shopping is a bad idea.
More. My friend John Ruberry, Marathon Pundit

More. Related, from Reason:

To avoid the gritty work of fighting it out in a free market, organized private interests -- such as Louisiana’s licensed funeral directors -- lobby the government for special regulations, preferential tax treatment and laws that keep out competition. They lobby lawmakers to constrain the same free markets in which they originally achieved success.

She got that right, sadly. De Rugy runs through the literature and gives example after appalling example, from coffin cartels to sugar barons to "small" businesses that are able to marshal millions of dollars to lobby the government for protection from competition. She also links to a Reason.tv video about Los Angeles' crackdown on mobile food trucks, which have been instigated by bricks-and-mortar restaurants. Milton Friedman put it this way in Reason in 1974:

The case for free enterprise, for competition, is that it’s the only system that will keep the capitalists from having too much power. There’s the old saying, “If you want to catch a thief, set a thief to catch him.” The virtue of free enterprise capitalism is that it sets one businessman against another and it’s a most effective device for control.

You stink, Illinois. You're eating your seed corn.

HT Instapundit.

More. The Radio Patriot.

UPDATE: Instalanche. Thanks for the link. I dedicate this, my first Instalanche to Milton Friedman. And the Chicago School, not the Chicago Way:)!!!

Crain's: Deal would boost state income tax to 5.25% on individuals, 8.4% on companies

More. Da TechGuy: Imagine the New Hampshire line times 49. Thanks for the link.

And Points and Figures.

More. Power and Control, an Illinois blogger, writes a note to Gov. Quinn.

Related posts: When States Default. Illinois Gets the Fisheye, Vice Tax and Big Bro Backlash, Calling out Collar County Women, The Tobacco Tax Trap

11 comments:

Choey said...

Illinois does that. They jacked up their cigarette taxes sky high and then couldn't figure out why the revenue decreased. It never occurred to them that Illinoians would go to Iowa and Missouri to buy cigarettes. Same for the gas tax. Anyone near the Iowa or Missouri border crosses the bridge to buy gas.

Anne said...

Yeah. Smarts are not their strong point.

Cook County does the same thing with the gas tax--and Chicago with a bottled water tax.

They think we're all obedient little slugs.

Well, a lot of their voters are, since they think it's always someone else who'll pay. The rest of us may just leave for good.

JorgXMcKie said...

As long as I can remember, the average IQ of the IL legislature has hovered around room temperature.

Anne said...

That would probably be an improvement.

pumping-irony said...

This line from the Chicago Sun-Democrat explains it all:

"Quinn disclosed the deal with House Speaker Michael Madigan (D-Chicago) and Senate President John Cullerton (D-Chicago) during a closed-door session Thursday afternoon with members of the Illinois Legislative Black Caucus, its chairman told the Chicago Sun-Times."

Why don't they just rename the state "Chicago and its Enablers"? Oh, yeah - truth is verbotten.

Anne said...

You are right, but too kind.

Chicago and its criminal co-conspirators.

rasqual said...

Galt.

Anne said...

Yes we can.

M. Simon said...

Anne,

Congrats on the 'lanche.

BTW I have a post up at Power and Control on the subject.

I'm with you re:leaving Illinois.

I believe JXM was referring to the Centigrade scale.

Anne said...

What would Illinois do without us.

Thanks for the heads up on your post.

M. Simon said...

Anne,

Thanks for the link!