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Retail affiliate marketing is in turmoil in Illinois, where a new law has prompted super-retailer Amazon.com to discontinue its affiliate program there. This isn’t the first state where this has happened, either: Affiliate Marketing Tax Controversy in Illinois
Now that is madness?
Or is that because they want online companies to not be as competitive as real world companies, since people are buying online over real world companies.“Governor Quinn has spoken unequivocally that the growing, innovative, job-creating industry known as Affiliate Marketing is entirely unwelcome in Illinois,” Brian Littleton, CEO of ShareASale, said in a press statement. “This is directly contrary to actions he took just a few weeks ago during his budget address when he announced the creation of the Illinois Innovation Council to address job growth in the tech community.”
This stems from the brick-and-mortar “lobby” stating how they are losing business to “Internet Stores” (who often are not paying taxes on internet sales), and the fact that states, such as Illinois, are under-water totally with their state’s economy. Illinois is in the worst shape of any state in the country, followed by NJ, NY, and Florida. The fact that Amazon.com has effectively pulled their affiliate program from IL is not good at all. Last year, in NY, Amazon.com started collecting tax on all sales that originated from customers in that state. But, they haven’t pulled their affiliate program from NY-based affiliate marketers, since they have operations in NY.
This all doesn’t bode well for affiliate marketers, IMO, since more and more brick-and-mortars are losing money in this horrible, yes horrible, economy.
Even with Amazon’s affiliate program leaving Illinois – I don’t see how its going to stop people in Illinois from purchasing online.
All they have done is stopped affiliate marketers from scratching out a living in difficult financial times.
Rak, you are absolutely correct. People will still shop on-line. Somehow the IL legislature thinks that by stifling affiliate activity in their state, that it will be a boon for their state. That’s incorrect. The state will see no measurable difference, nor will Amazon. Amazon won’t have to charge tax to IL residents, if affiliates aren’t in the picture. Amazon wins in that situation, although they will not have affiliates marketing for them.
So lobby groups get what they want, but it has no effect for them.
Unless they go out and launch their own affiliate marketing business to compliment their real world business – but I don’t see it as being part of their business mode… unless you are JC Penny!
