[MichaelColey]

Saw this in the news this morning...

CouponCabin.com Comments on Gov. Quinn Signing Internet Tax Bill

Originally Posted by Scott Kluth, CEO of CouponCabin.com

The Governor's approval of HB 3659 is deeply disappointing. As a result, Illinois will lose jobs, many thriving businesses like CouponCabin and other affiliate marketing firms will be forced to move to other states, and most important, this law will not generate the tax revenue Illinois thinks it will collect.

...

In the meantime, CouponCabin is actively exploring moving to Indiana. It's a shame we have to consider leaving our longtime home in Illinois, but we will do what is best for our business.

[teezone]

This story just got picked up by drudgereport, which will definitely raise MAJOR awareness - in addition to the press release, drudge links to the following:

Illinois Governor Signs Amazon Internet Sales Tax Law - Janet Novack - Taxing Matters - Forbes

Amazon Severing Relationships with Illinois Affiliates - WSJ.com

The battle over Internet sales tax - CSMonitor.com

[Chuck Hamrick]

What other affiliate companies are in Illinois. Networks I know of are Shareasale, Google. Doesn't CJ and LinkShare have offices there?

If its possible to summarize all of these including the income and personal property taxes paid by the employees. How many will need to lose their job and go on unemployment because they have family to take care of.

[MichaelColey]

I think all of the major networks have an office in Chicago, but the laws aren't targeting networks (fortunately).

CouponCabin.com and FatWallet.com are two big affiliates I know of. I'm sure there are many, many more. I'm not sure it would be wise to put together a list of affiliates, though.

[JCrooks - buy.at]

I understand that in radio interviews in Chicago, Fat Wallet has also indicated they plan to move their offices to another state in response to this new law. More jobs gone from Illinois.

[delsol]

You guys might be doing wishful thing.

Who cares about reality ?!? (SW)


PS: Hi "JCrooks - buy.at" welcome newbie you!

[arthurw]

As I understand it it doesn't really affect facilitators like CJ, ShareASale and Linkshare. It's the merchants who will terminate their relationship with advertisers, so while ShareASale is located in Chicago they may have less advertisers in their network but they can continue to do business. Unlike CouponCabin and FatWallet who are simply not able to offer coupons and affiliate links anymore as Amazon and other merchants just shut them off.

Am I correct?

[delsol]

Originally Posted by arthurw

As I understand it it doesn't really affect facilitators like CJ, ShareASale and Linkshare. It's the merchants who will terminate their relationship with advertisers, so while ShareASale is located in Chicago they may have less advertisers in their network but they can continue to do business. Unlike CouponCabin and FatWallet who are simply not able to offer coupons and affiliate links anymore as Amazon and other merchants just shut them off.

Am I correct?

Pretty much.

But networks might also be hurt since:
- A lawyer might recommend a merchant terminate their relationship with the network. The network is just like the affiliate if you really think about it. In other words, if an affiliate constitutes nexus, so does a network.

- Some merchant might stop their affiliate program rather than deal with this complexity.

- Might lose local business because of the bad headline.

- Decreasing business just by being associated with Illinois in the internet marketing industry.

[Chuck Hamrick]

And the threat of this dragging out for 3-5 years then getting hit with a big tax bill and legal bill is enough to get a network to pack-up and move. Affiliates as well. Forbes needs to come up with the worse cities to have a business in.

[sunshiner]

Originally Posted by Chuck Hamrick

And the threat of this dragging out for 3-5 years then getting hit with a big tax bill and legal bill is enough to get a network to pack-up and move. Affiliates as well. Forbes needs to come up with the worse cities to have a business in.

Or worst states.

[MichaelColey]

Another pretty comprehensive news article, this one from Internet Retailer:

Legal/Regulatory - Amazon to cut off Illinois affiliates

It confirms that FatWallet is looking at relocating to Wisconsin (which is only 5 minutes north of their offices).

[Chuck Hamrick]

Or worst states.

I hear people refer to the best places to live all the time, they are not generally ranked by state. I moved to Fort Collins in 1998 as it was one of the best place to live. Just visited Austin which I think did too well because traffic is an issue (try to get a table at a restaurant).

[PaulS]

I can see delsol's point... some merchants could consider simply canceling their entire program to avoid the headaches... others still, who might have considered starting a program, might have second thoughts.

These aren't likely to be the "big players" (yet), but some of the smaller sites that provide excellent niche opportunities.

[JCrooks - buy.at]

Anything which hurts our business hurts us all, whether we're an affiliate, merchant or affiliate network. That's why, no matter which company I'm with or what I'm doing, I'll do all I can to fight this threat to our livelihoods.

[Eric Ewe]

Originally Posted by MichaelColey

It confirms that FatWallet is looking at relocating to Wisconsin (which is only 5 minutes north of their offices).

With that short distance, it makes perfect sense for them to move. A good question is, how long before Wisconsin initiate a bill like that?

[Chuck Hamrick]

My question is if a company is physically located in Wisconsin and the employees work in Illinois is that a tax nexus.

I would watch Wisconsin as the Tea Party Governor is after budget cuts and more taxes.

[Eric Ewe]

Originally Posted by Chuck Hamrick

My question is if a company is physically located in Wisconsin and the employees work in Illinois is that a tax nexus.

They could get away with that if they work from home.

If I was FW, I would get Wisconsin or negotiate with xyz state govt to offer a tax shelter for them for xx years.

[TrishaLyn]

Originally Posted by PaulS

I can see delsol's point... some merchants could consider simply canceling their entire program to avoid the headaches... others still, who might have considered starting a program, might have second thoughts.

These aren't likely to be the "big players" (yet), but some of the smaller sites that provide excellent niche opportunities.

A lot of merchants have a knee-jerk reaction and just say CUT IT if it's not their most profitable marketing channel, which it normally isn't. Another factor is that, although the affiliate manager there might be willing to work, the higher-ups might not understand the law fully and decide to just cut.