Amazon Tax Rejected by the Illinois Supreme Court

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The "Amazon Tax" debate has made it into the Illinois Supreme Court. The tax was determined to go against federal ruling when it came to discriminatory tax on transactions that are digital. The court ruled on this issue 6 to 1 and the internet tax on sales in 17 different states were declared invalid.

Retailers in brick and mortar ventures did urge Congress to start regulating and collecting taxes on what goods are sold online. The Illinois Main Street Fairness Act from 2011 gave precedence to a federal law that does not allow taxing of business online, stated as "electronic commerce". There currently is no tax stated for retailers who are obtaining their customers through mail order ads in printed materials or through television.

The law that obligated retailers to obtain taxes for the state on sales that amount to $10,000 or higher from bloggers, affiliates, and internet commerce owners was making it difficult for some enterprises.


In response to this law many large internet based companies decided to leave Illinois in order to not miss out on payments refereed to as "click through nexus" that come from internet business. The links used in advertising to reach online retailers was discussed as being similar to how television and radio advertisements use codes in a promotion in order to offer a special rate. The obligatory party in paying for the taxes is not truly clear. Justice Lloyd Karmeler discussed that the federal law is not applicable due to the state statue not being able to " impose any new taxes or increase any existing taxes". The part obligated to collect the taxes has changed.

People who live within the state of Illinois will be not be receiving any type of refunds for items purchased online. If retailers within the state do not collect a sales tax the citizen shopping has to calculate what 6.25 percent of the sales tax and add it into their state tax return on their income.

It is not currently clear how much money has been collected as a result of the taxes. Local small businesses have the costs and risks from hiring people, local taxes, and sales tax. The average small business owner paying these cost often feels that the internet based companies have a clear advantage.
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