Quinn Signs Law to Collect Online Sales Tax

Illinois consumers may find themselves paying sales taxes on some Internet purchases under a new state law.

The law says sales taxes must be charged when people buy from online retailers through an Illinois-based partner. For instance, an Illinois business might sell products through Amazon.com.

Online businesses generally don't charge state sales taxes. Illinois customers are supposed to pay it directly to the state, but they rarely do.

Proponents say the measure that Gov. Pat Quinn signed Thursday will level the playing field between online businesses and brick-and-mortar stores. The Illinois Retail Merchants Association's David Vite said it will help revive Main Street and level the playing field for all retailers, large and small.

"Why go to Amazon and not pay the tax?" Vite said. "You can have just as much convenience by going to BestBuy.com or Target.com and still get the same price, the same service the same delivery. We don't have any objection. And not being directed one place or the other because of tax policy."

But opponents say the law could drive business out of Illinois. Brian Littleton, the CEO of Chicago-based ShareaSale.com, said Wal-Mart and other big-box retailers are the ones who will benefit. He said that's evident by Wal-Mart's strong backing of the legislation.

"Main Street booksellers are not being affected as much by Amazon as much as they are being previously destroyed by Wal-Mart," Littleton said. "Wal-Mart came into these towns and destroyed Main Street in the first place and now to use them as a kind of emotional response is a little bit disingenuous."

Littleton said the new law will result in less tax revenue for Illinois because it will cause the state to lose jobs. Amazon has terminated contracts in other states with similar laws and has threatened to do the same in Illinois.

Illinois-based Internet businesses say if that happens, they will move their companies and their employees.

(Photo courtesy of Maximum PC)