Knowledge Center

Friday, August 29, 2014

HMB's Breen Schiller Quoted in Tax Analysts Article on Illinois' Amended Amazon Law

"Illinois Governor Signs Amended 'Amazon' Law"

Excerpt from Tax Notes/State Tax Today, Friday, August 29, 2014

Illinois Gov. Pat Quinn (D) on August 26 signed a bill that will require some remote sellers to collect sales taxes, thus reestablishing an "Amazon" law in the state.

Quinn signed SB 352 , which establishes that a retailer that contracts with an in-state person to refer customers through the person's website or hand-delivered promotional material is considered to have nexus with the state. The new law is effective January 1, 2015.

Quinn received the bill on June 27 from the Senate, which passed it 33 to 15. The bill passed the House 62 to 50. Quinn had been widely expected to sign the bill, but waited the full 60 calendar days he is given to do so.

"I'm thinking we're going to see one of three things," Breen Schiller of Horwood Marcus & Berk told Tax Analysts. "You're going to see retailers not located in Illinois, they are going to pull any affiliates that they do have in Illinois. You're going to see an online retailer based in the state leave."

The third thing, Schiller said, depending on guidance issued by the DOR, companies could have their affiliates sign nonsolicitation agreements, which must be updated yearly and state that the affiliate is not soliciting on the company's behalf.

In a post published on the Horwood Marcus & Berk blog, Schiller wrote that previously, "Overstock.com and Amazon ended relationships with their Illinois-based marketing affiliates; Chicago-based CouponCabin moved to Indiana; and FatWallet.com, which had been headquartered near Rockford for three years, moved over the border to Wisconsin. We will have to wait and see what further repercussions the Illinois Amazon law will have, but it's probably a safe bet that these moves were the first among many to happen."

Copyright 2014 Tax Analysts. Reprinted with permission.

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