In its current form, the Amazon and other large retailers do not collect email Illinois 6.25 percent sales tax on products sold here. By law, individuals are supposed to report their purchases over the Internet, on the situation, but enforcement is impractical.
Now the General Assembly approved a so-called Amazon tax, which the governor expects to sign Pat Quinn. This bill has nothing in common with the rise in tax revenue scandalous Quinn became law.
Rather, it is a sensible step toward what we hope will be a more equitable solution: The ideal gap must be closed by the federal law that provides a solid legal base and simplify tax codes different. However, several bills have gone nowhere on Capitol Hill in recent years, leaving the cash-strapped states with no choice but to proceed on their own.
The new law, however, the thrust of Illinois in an unresolved question: Under the Commerce Clause of the U.S. Constitution, it is unclear whether Amazon or other out of state e-tailers may be forced to play tax collector for government officials as intended.
Companies selling over the Internet and collect the tax if they have a physical presence in the state. Covering the bricks and mortar retailers such as Borders or Barnes & Noble. New York and other states have imposed the same rules on Seattle-based Amazon and similar online retailers, alleging that his relationship with the local marketing affiliates amount to a presence in the state. Illinois law follows this approach.
Amazon is committed to fight against these measures, in part by cutting its affiliates, which cover a portion of sales shipped to the store. At least one, CouponCabin.com has threatened to leave Illinois if Quinn signs the bill.
Quinn must sign anyway. To encourage California and other states along the fence to go ahead with similar legislation, which in turn will require online retailers to reconsider their threats of scorched earth. The pressure will mount to the federal solution we need.
Here no one relishes the idea of a new business tax. On the surface, it sends the wrong message, especially from a state legislature with a terrible record of thwarting the creation of employment.
However, many companies in Illinois, including the Association of Retail Merchants of Illinois, hopes that this act of simple fairness. They are right. Amazon and their families earn hundreds of millions in sales to Illinois residents. Why e-tailers gain an advantage in price competition stores that are forced by law to collect sales tax? When a buyer decides to buy a book, unequal tax policy should not determine who makes the sale.
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