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Court strikes down IL internet sales tax law

Tue, 01 May 2012 17:15:39 CDT
By: Charlie Schlenker

A Bloomington-Normal businessman says he's not too upset a state court rejected a law aimed at leveling competition between on-line and conventional retailers. The so called Amazon tax law passed last year and requires bricks and mortar stores in Illinois that vend through Amazon to have Amazon collect Illinois sales tax for them. Dick Smith of Wild Country Outfitters in Normal says the overall goal of the rejected sales tax law is a good one.


But, to assure a truly level playing field, Smith says a federal law may be the right way to go. To avoid having to collect tax, Amazon cut ties with affiliates in Illinois. That prompted some affiliates to move out of state.


The judge in the case said the state law conflicts with the Commerce clause of the Constitution and with existing federal law limiting some internet related taxes. Smith says a federal law could make administrative oversight of sales tax collection easier. Both sides are appealing the ruling.


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