Illinois High Court Invalidates ‘Amazon Tax' For Sales

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.