Killing the small business in the cradle



[Editor’s note from Susannah: The great blogger, Da Tech Guy (who is also my good friend), is now going to be writing in our Business and Tech section–and, he is occasionally going to be posting his awesome interviews with movers and shakers in the conservative movement on the front page. Please extend to him a warm TMR welcome. Thank you.]

As regular readers of my blog know, I spend a lot of time going door to door talking to business people in order to sell ads for my radio show (DaTechGuy on DaRadio Saturday Mornings 10 a.m. on WCRN AM 830 BTW).

With the economy in trouble nationwide and jobs scarce to come by, many people (including me) have decided to go into business for themselves. Just yesterday I met a lady at a cleaners shop in Acton who is painting silk scarfs as a new business while she looks for other work.

Small Entrepreneurs usually have it tough. One or two person operations put in an inordinate amount of labor to make a small amount of money (if any). In addition they have to follow all the governmental rules that are put before them as they attempt to get started.

One of the biggest advantages for such a person these days is the internet. The ability to market, sell and connect to a national and/or international customer bases gives the micro businessman a chance to succeed and the opportunity to grow into something larger than they ever dreamed…unless they live in Illinois that is.

Pat Quinn, the newly elected Democratic Governor of Illinois has decided to buck the prevailing winds and attempt to close his deficits by a new tax on internet sales signing Bill HB3659. As PR Newswire reports:

The new tax law relates to out-of-state merchants like Amazon.com and Overstock.com that do not have a physical presence in Illinois but have relationships with Illinois advertisers and publishers like CouponCabin.com. 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.

As a result Amazon.com has sent letters to Amazon associates in Illinois saying:

As a result of the new law, contracts with all Illinois affiliates of the Amazon Associates Program will be terminated and those Illinois residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, or SmallParts.com. Please be assured that all qualifying advertising fees earned prior to April 15, 2011 will be processed and paid in full in accordance with the regular payment schedule. Based on your account closure date of April 15, 2011, any final payments will be paid by July 1, 2011.

So these entrepreneurs who were once supporting themselves through Amazon programs or at least supplementing their incomes now have lost that income. How many will now instead of paying tax on income to the state, will find themselves requesting aid from the state to support themselves? Don’t worry, for those who want to continue in business there is another option:

You are receiving this email because our records indicate that you are a resident of Illinois. If you are not currently a permanent resident of Illinois, or if you are relocating to another state in the near future, you can manage the details of your Associates account here. And if you relocate to another state after April 15, please contact us for reinstatement into the Amazon Associates Program.

So if you’re an entrepreneur the solution is to simply follow the returning Wisconsin Senators back across the state line and re-open your business there. That’s apparently not just the solution for the small entrepreneur either; Coupon Cabin reports it is “actively exploring moving to Indiana.” I’m sure Indiana will be happy to take both the jobs and the tax revenues it produces while leaving Illinois the unemployment benefits to pay out to those people who don’t relocate.

In the last census Illinois was one of the losers, dropping a house seat. If such laws remain on the books expect a repeat performance in a decade.

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  1. Stix1972

    March 10, 2011 at 10:43 pm

    Glad to see you here

    Ah yes the good old Socialist State of Illinois is at it again to move more people out of the state. I really need to get out of this hell hole

  2. Steve Foley

    March 10, 2011 at 10:44 pm

    …and welcome to TMR DaTechGuy we're happy to have you!

  3. DaTechGuy

    March 10, 2011 at 11:30 pm

    Thanks for your kind words. I'll do my best to live up to the standards of the fantastic bloggers already here.

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