 Both House and Senate lawmakers this week approved
House Bill 3659,
which now heads to the governor's desk. Dubbed the "Amazon Tax," the
legislation requires major online retailers, such as Amazon.com and
Overstock.com, to collect the state's 6.25 percent sales tax from
Illinois customers.
The state can now collect sales tax from online sales of a business
that has an actual brick-and-mortar presence in the state.
But the proposed legislation considers Amazon and Overstock's
partnerships with local retailers as their extending arms, and this is
projected to bring in about half of the $150 million in sales tax
the state is now losing out on.
Amazon.com has sent a letter to Illinois-based affiliates stating
that it would terminate its partnership once Gov. Pat Quinn signs
the bill.
Chicago-based BradsDeals.com, a coupons publisher, says the bill
will push e-commerce businesses out of the state.
"Amazon will have the responsibility starting on July 1 to charge
sales tax to shoppers in Illinois as long as they're working with
small businesses in Illinois," said Brad Wilson, BradsDeals founder.
"Unfortunately, preserving the lack of sales tax to consumers is
more important to Amazon than working with us."
Other Illinois-based online retailers such as CouponCabin.com and
FatWallet.com could lose up to a third of their revenues. And some
are actually considering moving their business to another state -- a
thought not far from the corporate mind of FatWallet.com.
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"That could account for a large percentage of our revenue, in order
to keep our business going, because we make pennies on a dollar,"
said FatWallet spokesman Brent Shelton. "We'd probably be forced to
move the business to another state, where Amazon and Overstock would
still be willing to work with us."
A spokesman for the Illinois Department of Revenue predicts lawsuits
from major online retailers if the proposal is put in place. But
Mike Clemons says the new law will not create a loss of local jobs.
"I think this is legislation that will retain jobs in Illinois, and
create jobs in Illinois, because it will level the playing field
between your local brick-and-mortar retailer, who has to unfairly
compete with the Amazons and the Overstocks of the world," Clemons
said.
[Illinois
Statehouse News; By MARY J. CRISTOBAL]
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