Illinois Supreme Court Hears ‘Amazon Tax’ Case
From the Illinois News Network
Illinois Supreme Court justices appeared skeptical Wednesday when an attorney representing the state argued the constitutionality of a two-year-old state law designed to force certain Internet retailers to collect sales taxes.
Before the law was passed, companies such as Sears and Wal-Mart collected the state sales tax on their Internet transactions with Illinois customers. They did this because they had stores in Illinois, which constitutes a legal presence, or nexus, in the state.
But companies such as Amazon didn’t have to collect the tax because they did not have a physical presence in Illinois.
In order to draw more tax revenue and end an advantage some Internet retailers have over others, legislators in Illinois redefined the term “physical presence” to include marketing affiliates based in Illinois – typically coupon or deal websites whose operators earn commissions for driving shopping traffic to an online retailer.
It is a novel legal concept, said George Isaacson, an attorney for the Performance Marketing Association, the plaintiff in the case. He added, it “is a position that no other court has adopted.”
Isaacson contends the law goes against a requirement set by the U.S. Supreme Court in 1992 that establishes “physical presence” as having offices, branches, warehouses and employees in the state.
He added that the state law also violates federal statute, which has imposed a moratorium on states creating Internet-only taxes.
Read more in our daily News Update...
From the Illinois News Network
Illinois Supreme Court justices appeared skeptical Wednesday when an attorney representing the state argued the constitutionality of a two-year-old state law designed to force certain Internet retailers to collect sales taxes.
Before the law was passed, companies such as Sears and Wal-Mart collected the state sales tax on their Internet transactions with Illinois customers. They did this because they had stores in Illinois, which constitutes a legal presence, or nexus, in the state.
But companies such as Amazon didn’t have to collect the tax because they did not have a physical presence in Illinois.
In order to draw more tax revenue and end an advantage some Internet retailers have over others, legislators in Illinois redefined the term “physical presence” to include marketing affiliates based in Illinois – typically coupon or deal websites whose operators earn commissions for driving shopping traffic to an online retailer.
It is a novel legal concept, said George Isaacson, an attorney for the Performance Marketing Association, the plaintiff in the case. He added, it “is a position that no other court has adopted.”
Isaacson contends the law goes against a requirement set by the U.S. Supreme Court in 1992 that establishes “physical presence” as having offices, branches, warehouses and employees in the state.
He added that the state law also violates federal statute, which has imposed a moratorium on states creating Internet-only taxes.
Read more in our daily News Update...