Business
3:32 pm
Fri October 18, 2013

Supreme Court Strikes Down "Amazon Tax"

The Illinois Supreme Court today struck down the so-called "Amazon tax."  As IPR's Brian Mackey reports, the decision could pave the way for businesses to make more money online.

 Audio FileIPR's Brian Mackey reporting.Edit | Remove

The law was intended to force Internet retailers to collect Illinois sales tax. Even if such companies didn't have an office or physical store here, they might have had Illinois "affiliates." That would be a website that linked to a product on, say, Amazon.com, and got a small kickback for every sale. In a 6-1 ruling, the Illinois Supreme Court found this was discriminatory under federal tax law. That's because other media, from print newspapers to radio stations, can have similar relationships without having to collect taxes. George Isaacson represented the companies challenging the law, and says the Illinois case could have national implications.

"There have been very few decisions under the Internet Tax Freedom Act, and especially dealing with the issue of discrimination against electronic commerce."

In order to avoid the taxes, Amazon and other companies severed relationships with their Illinois affiliates. Illinois estimates it's missing out on more than $200 million in unpaid sales taxes for online purchases. The state says it's reviewing the decision and considering whether to appeal.

I'm Brian Mackey.