Sears latest store chain to woo Amazon affiliates

By Sandra M. Jones
Posted March 3 at 5:27 p.m.

Sears Holdings Corp. on Thursday invited sales affiliates worried about losing Amazon business to direct their online traffic to The Hoffman Estates-based company joins a growing chorus of other retailers looking to cash in on Amazon’s battle with state governments over collecting sales tax.

In an open letter written Thursday, Sears eCommerce President Imran Jooma said he wanted affiliates “around the country to know that you have a place with us.”, the world’s largest online retailer, relies on a fleet of deal sites and other online portals to direct customers to The affiliate websites typically send potential customers to Amazon’s website in exchange for a cut of sales.

But the Seattle-based online merchant has threatened to stop doing business with affiliates in states like Illinois whose laws require online retailers to collect sales taxes on purchases made by residents.

Wal-Mart Stores Inc., Best Buy Co. and Barnes & Noble Inc. issued similar public invitations, and more giant retailers are expected to follow suit in coming days.

Amazon’s ability to sell goods without charging sales tax has been a sore point with rival retailers and state governments for years.

As states grapple with budget shortfalls, pressure is building to generate online sales tax revenue by changing state law. The uncollected taxes of goods sold online and through catalogs totaled $8.6 billion in 2010, according to a Wall Street Journal report citing the National Conference of State Legislatures.

The U.S. Supreme Court ruled in 1992 that companies without a physical presence in a state aren’t required to collect state sales taxes.

An Illinois bill passed earlier this year and awaiting Gov. Patrick Quinn’s signature this month would require online merchants such as Amazon to collect and remit sales tax if, among other things, they work with affiliates based in Illinois.

As the biggest online retail company, Amazon’s ability to avoid collecting and remitting state sales tax has been the envy of brick-and-mortar retailers. Retail margins are so slim, typically under 5 percent, that not charging sales tax amounts to a price advantage.

Last month, bookseller Barnes & Noble launched the effort to poach disgruntled Amazon affiliates in states Amazon has threatened to leave.

“If Amazon doesn’t want you, we do,” said John Foley, president of Barnes & in a Feb. 14 letter.

Wal-Mart Stores followed suit earlier this week in California, extending its invitation to affiliates of Amazon and discount Internet retailer

Best Buy, for its part, said in its letter Thursday, that the consumer electronics giant remains “committed to our thousands of small business affiliates across the country.”

Amazon officials declined comment. Overstock officials were unavailable for comment.

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