NJN: Internet Sales Tax Signed Into Law in IllinoisMarch 15, 11
The passage of such legislation is being seen as a victory for independent brick-and-mortar retailers, including jewelers who have lost market share to Internet competitors that aren’t forced to charge sales tax on high-dollar items such as engagement rings and diamond earrings.
Sponsored by state Rep. Patrick Verschoore (D-Rock Island) and Senate President John Cullerton (D-Chicago), H.B. 3659, the “Mainstreet Fairness Bill,” was signed by Illinois Gov. Pat Quinn on Thursday and is effective immediately.
Illinois joins New York, Rhode Island and North Carolina on the list of states that have passed an Internet sales tax law. Similar legislation is under consideration in states including, but not necessarily limited to, Arizona, California, Massachusetts, Texas and Vermont, and is also under consideration on the federal level.
“Illinois retailers are crucial components of our state economy and local communities. We need to ensure those businesses are not at a disadvantage in our modern marketplace,” Cullerton said. “I believe this law is an important step in leveling the playing field for Illinois businesses.”
Affiliate programs are defined as programs in which e-tailers pay unaffiliated Web operators a commission for advertising their sites. In the past, even the mere threat of state governments passing Internet sales tax laws was enough for some retailers to cancel their affiliate programs in certain states, as online diamond seller Blue Nile did in North Carolina, Rhode Island and Hawaii back in 2009.
Blue Nile did not respond to request for comment on its affiliate programs in Illinois in light of this new law.
However, Reuters reports that Amazon.com Inc. and Overstock.com Inc. were threatening to terminate their relationship with affiliates in The Prairie State following passage of the new law. Walmart Stores Inc. and Sears Holdings Corp. praised passage of the Mainstreet Fairness Act and invited dropped affiliates to join their network.
At the request of Gov. Quinn, the Alliance of Main Street Fairness has started a web site to help affiliates affected by the new law expand their customer bases.
Jewelry industry trade organization Jewelers of America has long been a proponent of sales tax fairness legislation, both on the national and state level. JA provides a resource for members of the industry looking to express their views on this issue to lawmakers.