On April 25, 2012, Judge Robert Lopez Cepero, Cook County Circuit Court, issued a bench decision in the case of Performance Marketing Association, Inc. v. Hamer in which the Performance Marketing Association challenged Illinois' vigorously debated affiliate nexus law. On Performance Marketing Association's motion for summary judgment, Judge Cepero found H.B. 3659 to be an unconstitutional violation of the Commerce Clause of the United States and a violation of the Internet Tax Freedom Act.
H.B. 3659, effective July 1, 2011, amended Illinois' definition of "retailer maintaining a place of business in this State" to include out-of-state retailers in certain contractual relationships with in-state marketing affiliates, thus subjecting out-of-state retailers to Illinois' use tax obligations.
According to reports, a written order is expected from Judge Cepero in the coming days. We will continue to monitor Performance Marketing Association, Inc. v. Hamer as more information becomes available. If you have any questions about this legal update, contact Ryann Ricchio or another member of our tax advocacy group.