Additional Illinois developments are briefly summarized below.

Illinois Click-Through Nexus Legislation

As we reported in April, the Illinois Supreme Court struck down Illinois’ click-through nexus law, which expanded the definition of retailers obligated to collect sales tax to include Internet retailers, such as Amazon, that have no physical presence in Illinois, but contract with Illinois Internet marketers that refer potential customers to the retailers via a link to the retailer’s website (so-called “click-through” nexus). The Illinois Supreme Court struck down this statute because it discriminated against e-commerce in violation of the federal Internet Tax Freedom Act – in that other out-of-state retailers were not similarly subject to Illinois nexus based on in-state marketers. The Illinois General Assembly passed legislation, which was signed into law on August 26, 2014, by Governor Quinn, to correct this defect by subjecting all out-of-state retailers, not just e-commerce retailers, with in-state marketers to Illinois sales/use tax collection obligations. This new law will take effect January 1, 2015.

Illinois Appellate Court Upholds Invalidity of Cook County Use Tax on Non-Titled Property

The Illinois Appellate Court issued a decision in early August upholding a Circuit Court ruling that Cook County lacked statutory authority to impose a use tax on non-titled property tax.  Businesses making large purchases of tangible property for use in Cook County, such as airlines and construction contractors, will be most affected and will want to investigate securing refunds for any use taxes paid to Cook County.

Illinois Appellate Court Upholds Assessment of Amusement Tax Against Full Cost of Tickets for Premium Seats and Luxury Suites

The Illinois Appellate Court also issued another decision in early August upholding a Cook County amusement tax assessment against the Chicago Bears. The court ruled that the value of amenities included in club and luxury suite seat prices (access to lounges, parking passes, etc.) were subject to the amusement tax.