Thursday, March 10, 2011 Comments on Gov. Quinn Signing Internet Tax Bill

If you are a Democrat, no tax is a bad tax, whether or not the tax has "unintended consequences". Sometimes the consequences are obvious and still the taxes are imposed. In this case, other states have tried to tax internet sales in this way and, according to Scott Kluth, have lost both revenue and jobs. It would be nice if Democrats would try cutting spending once in awhile. They might find the results a whole lot better.

Scott's company is exploring a move to Indiana, a more friendly to business state.

Misguided Effort Will Drive Thriving Internet Businesses to Nearby States

CHICAGO, March 10, 2011 /PRNewswire/ -- Illinois Gov. Pat Quinn today signed the so-called Internet tax bill (HB 3659), which requires out-of-state merchants who advertise on websites based in Illinois to collect taxes from all Illinois customers.

The new tax law relates to out-of-state merchants like and that do not have a physical presence in Illinois but have relationships with Illinois advertisers and publishers like Under the provisions of the new law, these merchants are deemed to have a presence (nexus) in Illinois and are therefore required to collect Illinois sales tax.
In response to the Governor's approval of HB 3659, Scott Kluth, CEO of, issued the following statement:

"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.

"Those of us who opposed HB 3659 made every effort to persuade the Governor that it is a misguided attempt to bring 'fairness' and new revenue to Illinois by requiring out-of-state merchants who advertise on websites operated in Illinois to collect sales taxes from Illinois customers.

"The reality is that just like other states that approved similar legislation, Illinois will not collect additional tax revenue. Instead, the merchants who would be affected by this law will simply sever their contracts with Illinois affiliate advertisers, as they have done in every other state. The only result of this law is that high-growth businesses like CouponCabin will be driven out of Illinois to maintain their relationships with out-of-state merchants.

Read full PR Newswire article here.

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