Illinois amends click-through nexus statutes to address Internet Tax Freedom Act violation

On Aug. 26, Illinois Gov. Pat Quinn approved legislation that amends the state’s sales and use tax click-through nexus statutes. In 2013, the Illinois Supreme Court held in Performance Marketing Association Inc. v. Hamer that the state’s click-through nexus statutes were void and unenforceable due to the federal prohibition against discriminatory state taxes on electronic commerce contained in the Internet Tax Freedom Act. The legislation addresses this decision by expanding the nexus provisions to include situations where potential customers are referred to out-of-state retailers by a promotional code or other mechanism beyond an Internet link that allows the retailer to track purchases. Also, the legislation adds provisions that permit the retailer to rebut the presumption of nexus. This legislation is effective Jan. 1, 2015.

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