Ruling: Supreme Court Gives States More Authority to Collect Sales Tax

The State and Local Tax team has been discussing the ramifications if the Supreme Court ruled in favor of the states and overturned Quill. That has now come to pass.So what does this mean?

• In the old days, a state could not require a retailer to charge sales tax if they didn’t have a physical presence in the state
• Along came the internet and the playing field changed
• That gave an unfair advantage to the out-of-state companies compared to those with a physical location (brick and mortar) in the state
• Essentially, the Supreme Court has given states latitude in requiring retailers to charge sales tax
• Based on what some states (including Illinois) are already doing, the states will set sales thresholds that say, “If you sell over $200,000 you have to collect and remit sales tax."

Under “Marketplace Fairness” provisions in Illinois budget legislation, retailers will be liable for collecting tax if one of two sales thresholds are met for 12 months. Retailers meet the threshold for a given period if:

• Their sales of property to customers in Illinois were $100,000 or more;
• They enter into 200 or more sales transactions in Illinois.

If you're wondering whether this will have any ramifications for your business, give us a call and ask for anyone on the State and Local Tax team: Denise, Robert, Mandy D., Regan, Tim, or Emily.