DM News: Suit: Online Retailers Evaded Taxes
The State of Illinois is suing 62 e-tailers, alleging that they failed to pay sales taxes on goods sold even though they maintain "a physical presence" in the state. In a novel interpretation of such a physical presence, Illinois maintains that chain retailers, such as Barnes & Nobles should have to pay sales taxes on all Internet transactions, even if the physical store - like the one on Michigan Avenue in Chicago - had nothing to do with the transaction. If this suit proved successful, it would hand a severe disadvantage to chains that held bricks-and-mortar businesses and might even lead to firms selling off Internet divisions to prevent such ongoing liabilities.
