ILLINOIS (WIFR) – If we want to shop online to avoid the Illinois sales tax, we’re now out of luck, thanks to a change in policy that is designed to level the playing field for local business owners.
The new rule, which took effect on January 1, expands the definition of out-of-state sellers that must register in Illinois and collect sales taxes. Under the old rule, companies like online retailers don’t have to charge customers the Illinois sales tax. According to a report by the national conference of state legislatures, Illinois lost more than $1 billion in unpaid sales taxes in 2012.
“I think it's going to help small businesses around here. It levels the playing field so I think it's going to help the internet purchases and everything and I think if you're priced correctly, there shouldn't be an advantage to buying necessarily everything on the internet. I think more people can buy local again,” says Christopher Anderson with Christopher’s Fine Jewelry.
We also reached out to Fat Wallet in Beloit, which is an internet site that specializes in providing people with discounts and coupons to online stores. Under the new rule, they must comply with the sales tax, but they declined to comment.
Fat Wallet moved from Illinois to Beloit more than four years ago because of the state’s sales tax. Only four other states, including California, Texas, New York, and Florida have recorded higher losses in 2012 from unpaid state sales taxes.
SPRINGFIELD, Ill. (AP) -- The state of Illinois' Department of Revenue has new rules this year to target the collection of sales taxes from out-of-state businesses.
The new rules took effect Jan. 1 expand the definition of out-of-state retailers that must register in Illinois and collect sales taxes.
The (Springfield) State Journal-Register reports state lawmakers revised the rules last year after the Illinois Supreme Court ruled that previous rules singled out online sellers, violating federal laws. The new rules dropped the word "Internet" and now cover catalog, mail-order and similar retailers along with online sellers.
Illinois' brick-and-mortar businesses say not collecting the taxes gives out-of-state retailers an advantage.
A National Conference of State Legislatures report found unpaid sales taxes in Illinois accounted for an estimated $1 billion in 2012.