The Illinois Appellate Court held that a defendant out-of-state retailer was not liable under the state’s False Claims Act because it conducted a good faith inquiry into its use tax collection obligations for both its Internet and catalog sales. The defendant had franchisees operating in Illinois and sold products through a website and catalog, and it sent employees into the state to visit the franchisees about once a year. The Appellate Court agreed with the trial court that, with respect to the defendant’s Internet sales, the defendant conducted a good faith inquiry into its use tax collection obligation and did not recklessly disregard an obligation to collect the tax. The court further overturned the trial court’s determination that the defendant did not conduct a good faith inquiry into its use tax collection obligation for catalog sales following its 2005 policy change requiring its franchisees to distribute 1,000 catalogs per year. The court cited to the reliance on a positive outcome in a prior New York State audit and on annual financial audits as proof that the defendant did not knowingly or recklessly disregard an obligation to collect use tax. People ex rel. Beeler, Schad & Diamond, P.C. v. Relax the Back Corp., 2016 IL App (1st) 151580 (Ill. App. Ct. Oct. 17, 2016).