The Illinois Senate has passed an Internet Tax Bill meaning that out-of-state merchants such as Amazon will have to pay state tax despite having no physical presence in the area.
The Bill will be made law immediately if signed by the Governor today, having already been approved by the House of Representatives yesterday, and will effect firms such as online retail giant Amazon who have relationships with Illinois advertisers and publishers.
It is thought that the reason behind the passing of the Bill is to increase tax revenues for the state despite a firm having no actual presence there.
However there have reportedly been problems with similar laws made in other states such as New York, Colorado, North Carolina and Rhode Island that have charged out-of-state companies tax, with merchants severing relationships with publishers in the state. Similar legislation to the Internet Tax Bill has been rejected by twelve other states however.
It is noted that in Illinois it is believed the passing of legislation will have significant effects on the profits of firms affiliated to Amazon such as CouponCapin which expressed dismay at the prospect of the new law, stating that such a move is in fact counterintuitive.
“Needless to say, we are disappointed by the passing of the legislation today. It was disheartening that both Houses passed this bill in 30 hours without a full and fair opportunity for the voice of Illinois small businesses to be heard.”
“Unfortunately, this bill will do significant harm to our growth by cutting our business by nearly one-third.”
“We hope the State will see that this bill will fail to achieve its revenue-raising goal, and instead cause drastic hardship for small businesses like ours. We know from other states’ experience that the tax revenue does not materialize.”
“Should this bill become a law, Internet affiliate jobs will be lost with no increase in state revenue. The other states that have passed this are moving to repeal it for this exact reason. We hope consideration will be given to the impact on small businesses before this bill becomes a law.”