Monthly Archives: October 2013

‘Amazon’ sales tax law overturned in Illinois

Retail - 'Amazon' sales tax lawIn a USA Today article,  we learn that on Friday: the Illinois Supreme Court has thrown out a law  which taxes certain internet sales.  According to the court: the “Amazon tax”  violated the federal ban  against unequal taxes on digital transactions.   The first time a court has overturned an ‘Amazon’ internet sales tax law.

The Illinois department of revenue is considering taking the matter to the U.S.  Supreme court.

The court has found that the Illinois “Main Street Fairness Act”  of 2011  is superseded by federal law (the federal Internet Tax Freedom act, which is scheduled to expire in November 2014).   Federal law states that imposing a tax on electronic commerce is prohibited if it requires collection that is not required for transactions by other means.      For example:  if a tax  does not apply to purchases through  print or television advertisements.

The Illinois law required  out of state retailers to collect taxes for sales that involve “in-state affiliates”,  “website operators”, and bloggers.      For example,  if a blogger in Illinois  were advertising a product in exchange for a share of the sales revenue,  then the Illinois law would require the merchant in another state to collect sales tax in Illinois.

David Vite of Illinois Retail Merchants association argues, Friday’s Illinois ruling ‘underscores the need’ for Capitol Hill action,  arguing  “It’s time for the federal government to clarify and finish putting retailers, who are making payroll and putting people to work, on equal footing.”.

 

 


Additional Reading

Affiliate Nexus and Sales Tax: Grabbing remote vendors with So-called ‘Amazon’ tax laws

April 2012, Chicago Tribune: Illinois’ Internet tax law unconstitutional, Cook county judge says

Mar2011, ChicagoMag.com: Illinois’ Amazon Tax: Companies Cry Foul on Main St Fairness Act

 JDJournal: Illinois Internet Sales Tax Struck Down by State Supreme Court

Chicago Tribune: Illinois Supreme Court strikes down ‘Amazon tax’

USA Today: Illinois high court rejects ‘Amazon’ Sales tax

CNBC: ‘Amazon tax’ for sales thrown out in Illinois

Forbes: Illinois High Court Shoots Down Amazon Sales Tax Law; Will SCOTUS Step In?

 

Federal law:

Cornell.edu: 47 USC 515 Internet Tax Freedom Act

 HowStuffWorks: What is the internet tax freedom act?

 

GovTrack : Permanent Internet Tax Freedom Act

OpenCongress: Marketplace fairness act

US Senate Bill proposed: S. 743: Marketplace Fairness Act of 2013

Wikipedia: Marketplace Fairness Act