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Amazon Ditches Illinois Affiliates (Including Roger Ebert) To Avoid Web Tax

Illinois Governor Pat Quinn signed a bill into law Thursday that will require Amazon (NSDQ: AMZN) and other internet retailers that use “affiliates” in the state to start paying the state’s 6.25 percent sales tax. Apparently, that spurred Amazon to quickly notify its Illinois affiliates-which include famed movie critic Roger Ebert-that their Associates accounts will be shut down on April 15. “I have 20 more days to make a fortune,” quipped Ebert in a tweet this evening. This is part of a state-by-state battle for Amazon; a report by Forbes says that the company has promised to similarly terminate 10,000 affiliates in California if similar legislation passes in that state.

In the past few months, Amazon has shown it’s willing to play serious hardball to avoid state income taxes. It collects taxes in states where it has a major physical presence, which include North Dakota, Kansas, and Kentucky, in addition to its Washington state headquarters. But Forbes tax columnist Janet Novack calculates that 87 percent of Americans live in a state where brick and mortar entities pay a sales tax, but Amazon doesn’t. That’s a huge advantage for Amazon, but it’s under enormous pressure at a time of crunched state budgets. Amazon company is already paying sales tax in New York, even though it continues to fight that issue in court; and after getting a tax bill from Texas authorities, it shut down a distribution center in that state, putting 110 people out of work.

Amazon associates advertise and link to Amazon products, then earn money by getting a cut of those sales.

The new law has some smaller web-based businesses threatening to leave Illinois, as well.

As for Ebert, he only started using the Amazon Associates program recently. In a January blog post, he explained some of his reasons for doing so. And even though the change is going to hit Ebert’s pocketbook, he’s not on Amazon’s side. The retail giant is simply trying to “evade fair and just Illinois tax,” he tweeted.