State of the Amazon: Update
Last Wednesday I wrote a brief “State of the Amazon.” Between then and now, the piece became incomplete. It’s already time for an update.
In March 2011, the Main Street Fairness Act was passed. The law expanded the definition of “physical presence.” A seller is required to collect and remit sales tax only if it is deemed to have a physical presence within the state. The new law implicated affiliate companies, many of which earn commissions for directing web surfers to an online store.
The Chicago Tribune is reporting the Main Street Fairness Act was declared unconstitutional by Cook County Circuit Judge Robert Lopez Cepero last week. The interstate commerce clause of the U.S. Constitution limits who a state can tax, and the judge took the position the State of Illinois overstepped its authority.
I suspect the defendant, the Illinois Department of Revenue, will file an appeal if it hasn’t already.
The Houston Chronicle is reporting the Lone Star State reached an agreement with Amazon on Friday for the online retail giant to begin collecting sales tax in the state on July 1. In addition, Amazon agreed “to create at least 2,500 new jobs in Texas over the next four years and make at least $200 million in capital investments in the state.”
All parties seem to be in support of some federal solution, but that doesn’t mean anything will get done. We’ll see.