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Monday, December 2, 2013

Cyber Monday Question: Is the Illinois "Amazon Tax" Really Dead?

On this Cyber Monday, we report on a case related to internet sales tax.  In our October 22, 2013 blog post, we reported on the case Performance Marketing Assoc., Inc. v. Hamer, in which the Illinois Supreme Court struck down the state law which attempted to require on-line retailers who worked with in-state affiliates to collect and remit sales taxes to Illinois. This result conflicts with a similar case from the State of New York, Overstock.com, Inc. v. New York Department of Taxation and Finance, et al., where the state court upheld such a taxing scheme.
On December 2, 2013, the United States Supreme Court decided to reject the appeals of Amazon and Overstock.com of the New York court’s decision. Does this mean the Illinois case was wrongfully decided? It is not clear. Because the New York appeal was rejected without comment it is difficult to predict whether the Court refused to hear the case because it found the result to be correct or because the issue is not ripe for a decision. Frequently, the Supreme Court will defer cases until a conflict between appellate courts arises so that it can clarify a contested issue of law.
Despite this uncertainty, there are two takeaways from this case that are relevant to Illinois. The New York version of the Amazon Tax provides a model for the State of Illinois to follow if it wishes to re-enact such a law. Furthermore, since the Marketplace Fairness Act has been held in the U.S. House of Representatives without a schedule for consideration, the Supreme Court’s non-decision gives renewed hope to Illinois municipalities that additional revenue may become available from on-line purchases.
Post Authored by Adam Simon, Ancel Glink


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