Today’s decision by Illinois governor Pat Quinn to sign HB 3659, affiliate nexus legislation, confirms that states are willing to try anything to narrow the budget gaps they face. The drawbacks to such legislation are well-known: loss of income for affiliates and the potential for extensive litigation (as New York has been experiencing for the past three years).
Amazon has already announced its decision to cancel its relationships with Illinois affiliates, as reported in this Wall Street Journal article. Other online retailers are expected to follow suit.
The bright spot for Illinois-based affiliates is that other large retailers—those who already collect sales tax online due to their brick-and-mortar presence—have offered to step in. Barnes & Noble, Wal-Mart, Best Buy, and Sears are among the retailers that have reached out to Illinois affiliates. Also, the Stand with Main Street organization has begun a new “matchmaking” service to pair affiliate marketers that have been dropped by Amazon with other retailers.
We hope Illinois will soon join its neighboring states and join the Streamlined Sales and Use Tax Agreement (SSUTA). Illinois senator Dick Durbin is expected to introduce the Main Street Fairness Act in Congress any day now. Once enacted, that law will enable SSUTA states to require online retailers to collect the sales tax that is already due on all online purchases.