March 11, 2011, 3:04 PM

Amazon to cut off Illinois affiliates

(Page 2 of 2)

Approximately 9,000 affiliates are based in Illinois, according to the Performance Marketing Association. In 2009, the last year full details are available, Illinois affiliates collected $611 million in advertising revenue on which they subsequently paid about $18 million in state income tax, Madigan says. She says Illinois affiliates represent 4.5% of all affiliate revenue in the United States and that the state has the largest concentration of any state of “super-affiliates,” which she defines as affiliate marketing companies with 50 or more employees. This includes FatWallet.com. 

Madigan says most affiliate marketers work with many e-retailers, but that affiliates will find it difficult to make up the income they will lose when Amazon and other online-only retailers terminate their relationships in Illinois. “States can’t compel out-of-state retailers to collect state sales tax for them. E-retailers will terminate their relationships and the state will not get new sales tax,” she says. “People who depend on this advertising revenue get hurt and small businesses will have to lay off people or move.” Uncertain of its next moves, FatWallet.com says it has already pulled two job listings.

Comments | 2 Responses

  • Gov. Pat Quinn is an honest-to-goodness nincompoop in epic proportions! This is a good article, but it missed one very important point: How will Illonis collect additional sales tax from this law? ANSWER: they won't. Hundreds of out-of-state retailers like Amazon.com will legally side-step this legislation by firing affiliates. Business will go on for these retailers as usual, Illonis will not collect any additional sales tax. Furthermore, they're going to lose tax revenue from the affiliates who were making money and paying taxes. This is a LOSE-LOSE scenario!

  • Guess who is heading up this "retailer group"? Like I needed another reason to despise big box stores. Now they are using state legislation to push their competitive agendas.

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