Yesterday’s article in the Chicago Tribune by Columnist Eric Zorn covers all the issues related to sales tax collection by internet merchants. The article starts by highlighting a local retailer who has been steadily losing business on price to internet retailers. Mr. Zorn goes on to explain the finer points of use tax reporting and remittance (even helpfully including links to the tax forms that need to be completed for out-of-state sales), and goes on to say that use tax collection “…has a low compliance rate…[f]ewer than 5,000 taxpayers filed ST-44s in fiscal 2010, according to the revenue department, leaving an estimated $163 million in online Illinois sales taxes unpaid.”
The article wraps up with a discussion of why Internet companies have escaped sales tax collection thus far (Quill and Bellas Hess Supreme Court decisions) and why that view is outdated: “It wasn’t a particularly urgent question when the Web was young and e-tailers argued successfully that taxing Internet purchases would strangle the baby of e-commerce in its crib. But now that e-commerce is an obstreperous adolescent, conventional small businesses are gasping for air and cash-strapped states are eyeing all this lost revenue hungrily.”
Good points, great article, thanks Mr. Zorn.