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* Forwarded by a reader…
From: “Amazon Associates”
To: xxxxxxxxxx
Sent: Wednesday, December 4, 2013 5:55:32 PM
Subject: Amazon Associates program is again open to residents of the State of IllinoisHello,
We’re pleased to announce that the Amazon Associates program is again open to residents of the State of Illinois.
We’re now able to re-open the program because the Illinois State Supreme Court recently struck down legislation that had forced Amazon to close the program to residents of Illinois.
Amazon strongly supports federal legislation like the Marketplace Fairness Act that’s now pending before Congress, which is the only constitutional way to resolve interstate sales tax collection issues.
Some background from October…
The Illinois Supreme Court threw out a state law Friday that taxes certain Internet sales, saying the so-called “Amazon tax” violated federal rules against “discriminatory taxes” on digital transactions.
The 6-1 ruling represented the first time a court had invalidated an Internet sales tax law among 18 states that have them. It brought an immediate cry from traditional, store-based retailers for Congress to step into regulating taxes on web sales.
The court determined that Illinois’ 2011 “Main Street Fairness Act” was superseded by the federal law, which prohibits imposing a tax on “electronic commerce” and obligates collection that’s not required of transactions by other means, such as print or television.
More background here.
* In other news, as you’ll recall the Illinois Supreme Court recently struck down the Department of Revenue’s sales tax collection rules. The ruling came in a case involving a fuel oil company which opened a satellite office in a low-tax county in order to avoid paying higher sales taxes to the RTA and Cook County. Tom Johnson, the President emeritus of the Taxpayers Federation, argues in Crain’s that new rules will be tough to devise…
The problem is for the many retailers that take orders over the phone, through the mail or on the Internet and then have the goods delivered to their customer from either their own or from a supplier’s inventory. The “sales” activities could occur in more than one community in Illinois or even in another state dependent on the facts of a particular sale. Which tax rate should apply, and what if the majority of the selling activity is out of state?
Our state’s tax collectors deserve rules they can follow and should not be subjected to second-guessing years after the fact. A case-by-case weighing of a near-limitless number of factors would fly in the face of good tax policy and be unworkable.
Tax must be calculated and collected at the time of the sale, but a nebulous factor-weighing test would require almost every retailer with more than one location in the state to engage in guesswork, putting them in a never-ending game of “gotcha.” When they collected too little tax, the state or local jurisdictions would sue; when they collected too much tax, class-action lawsuits on behalf of inadvertently overtaxed customers certainly would follow.
Now that this Pandora’s box of tax administration has been opened, it is the Department of Revenue’s job to help its partners comply easily. Guessing is not an option.
posted by Rich Miller
Thursday, Dec 5, 13 @ 11:43 am
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==that had forced Amazon to close the program to residents of Illinois.==
Forced? Please.
You played hardball and won. No need to play the victim after the fact.
Anyone know if Coupon Cabin, Fat Wallet, etc are moving back home to Chicago now? I can’t imagine it’s been easy recruiting IT types to Whiting, Beloit, Pleasant Prairie, etc.
Comment by Jimmy CrackCorn Thursday, Dec 5, 13 @ 12:02 pm
“The problem is for the many retailers that take orders over the phone, through the mail or on the Internet and then have the goods delivered to their customer from either their own or from a supplier’s inventory. The “sales” activities could occur in more than one community in Illinois or even in another state dependent on the facts of a particular sale.”
So one factor in this new ‘decision making process” for internet based sales taxes could be inventory location? OMG, we’ve just potentially gone back to the bad olde days of the 1960’s and early 1970’s of chasing inventory. “Where was this particular sweater/part/tool physically located located when the sale occurred?”
And we are going to depend upon IL DOR to get the administrative rules all in place for a simple, easy to follow process? Yeah, right. I’m getting a case of really, really, really bad visuals just thinking about that.
Comment by Judgment Day (Road Trip) Thursday, Dec 5, 13 @ 12:46 pm
“The “sales” activities could occur in more than one community in Illinois or even in another state dependent on the facts of a particular sale. Which tax rate should apply, and what if the majority of the selling activity is out of state?”
Not an impediment on car sales. Why has political advocacy devolved to concern trolling?
Comment by Chris Thursday, Dec 5, 13 @ 1:17 pm
In other words: “You have the right to establish a tax, but not one that no one can figure out how to pay or collect.”
Comment by walkinfool Thursday, Dec 5, 13 @ 1:18 pm
I’d be fine with tax collected either at the place of sale (perhaps defined as the location in the state with the most employees) or the place of delivery. We have the technology to handle the latter through on-demand web lookups or, if a company doesn’t want to take the time to do that, collect the highest rate for all their IL customers, specify the ZIP for which it was collected, and DOR can figure it out on the back end. Setting the rate based on inventory location wouldn’t be that hard with modern technology either but, really, place of most employees would be easier all around to administer.
Another approach is to make the tax due on delivery (although likely prepaid to not delay delivery). Local UPS, FedEx, etc branches could be required to collect it and they’d only have a handful of rates to worry about. This would go over like a ton of bricks but would address the hundreds of rates issue for companies while also solving the interstate commerce issue as well.
Comment by thechampaignlife Thursday, Dec 5, 13 @ 2:00 pm
Maybe we should stop trying to wheedle every penny we can out of taxpayers, and stick with one method for everything. Point of sale makes the most sense, and if cities like Chicago are worried about satellite offices, too bad, maybe they need an incentive to lower their sales tax rate.
Comment by countyline Thursday, Dec 5, 13 @ 2:55 pm
Packages mailed to buyers must contain the buyers zip code. The sales tax rates in each zip code are easily put into a computer by the selling companies. Then require the seller to add the sales tax to the amount of the items bought.
Comment by Tom Joad Thursday, Dec 5, 13 @ 4:47 pm
@thechampaignlife, zip codes do not always or even often coincide with tax boundaries. Some zips include in-town, more then one town, unincorporated areas, in/out of townships, fire districts, mosquito districts, etc., etc… Some zips even overlap county lines. Collecting taxes accurately by zip would require a lot of work. Illinois has had a mandatory estimated excise tax on the Illinois income tax the last couple of years. This was put in specifically to cover the non-taxed internet purchases by Illinois residents. If they put in the sales tax they would have to give up the estimated excise tax.
Comment by DuPage Thursday, Dec 5, 13 @ 7:41 pm
They could avoid the problem by collecting the tax at the other end. Forget the sales tax and tax income. Not a regressive, you already know where people live and work and you can tax money that isn’t even spent.
Comment by NoGifts Friday, Dec 6, 13 @ 6:45 am