Illinois why do you keep hitting yourself?

[Gaspar]

Illinois Governor Pat Quinn today signed controversial legislation requiring Internet retailers like Amazon.com and Overstock.com to collect Illinois' 6.25% sales tax if they have affiliate sellers in the state.

The major internet retailers such as Amazon responded by cutting all ties to affiliates in the state of Illinois, removing millions of dollars in affiliate payments from the Illinois economy.

In a statement, Scott Kluth, founder and CEO of Chicago-based CouponCabin.com called the Governor's approval of the bill "deeply disappointing" and said he is "actively exploring" moving his seven year-old business to Indiana.

http://blogs.forbes.com/janetnovack/2011/03/10/illinois-governor-signs-amazon-internet-sales-tax-law/

[Conan71]

States are in a Catch 22.  They are losing sales tax revenue to the interwebs, so rather than do something sensible like cutting spending like you and I would if one of our income streams were impaired or drying up, they just simply decide to claim more revenue.  Economic reality is going to dictate that few of the affiliates will actually move out of state.

Still though, might cost jobs, and certainly revenue which might be collected as income tax.