The Illinois Supreme Court is invalidating a two-year-old Illinois law charging taxes on certain Internet sales.
The justices ruled 6-1 in an opinion released Friday to invalidate the so-called "Amazon tax." The ruling determined that the law violates a pre-emptive federal decree prohibiting "discriminatory taxes on electronic commerce."
Lawmakers created the Internet tax in 2011 on out-of-state electronic retailers. The law claimed those merchants maintained a presence in the state through a website link. In other words, if a blogger referred customers to a company by encouraging clicking on a site-based advertisement, that was "presence" in Illinois. That obligated the seller to collect sales tax.
Justice Lloyd Karmeier dissented, saying the law doesn't impose any new taxes.
(The case is Performance Marketing Ass'n v. Hamer.)