Performance Marketing Association Sues Illinois over Affiliate Nexus Law

The Performance Marketing Association (PMA) has filed a lawsuit against the Illinois Department of Revenue over the constitutionality of a newly enacted Illinois law that will force thousands of small businesses to downsize, relocate or close their doors.

Performance Marketing AssociationIllinois Governor Quinn signed House Bill 3659 into law this past March, which forces out-of-state retailers to collect Illinois state sales tax for Internet sales, based on the view that affiliate marketers constitute a tax nexus for the retailers.

The result of the legislation was that Amazon and countless other companies removed the affiliates of that state from their affiliate program, so they still do not assume a tax nexus, which means no additional tax revenue collected.

A month later, moved their operations and dozens of employees from Illinois to Wisconsin, because the new law made it prohibitive for them to continue doing business in Illinois.

Affiliate marketers should keep an eye on this modern day David and Goliath face-off, as small businesses fight to save the economy while bureaucrats hasten the march to double-digit unemployment.

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