Illinois Sues Online Retailers Claiming Cyber Tax Evasion | AccountingWEB

Illinois Sues Online Retailers Claiming Cyber Tax Evasion

On September 17, the House of Representatives passed the Internet Tax Non-Discrimination Act, the bill that imposes a permanent ban on taxes on Internet services. The current moratorium, set to expire on November 1, 2003, was a temporary fix installed two years ago, providing legislators with time to debate the issues of the permanent moratorium. The moratorium applies to all methods of Internet access, including pricier high-speed links taxed by some states.

However, the ban does not apply to online sales taxes, which are already prohibited under a Supreme Court decision unless the retailer has a substantial in-state presence.

Illinois Attorney General Lisa Madigan announced last week that she has joined 62 lawsuits against at least 62 companies alleging that the companies failed to collect and remit to the state sales tax on items sold through their Web sites.

According to Madigan, companies such as Gateway Computers, Barnes & Noble, The Finish Line, Inc., and numerous other retailers cheated Illinois out of millions of dollars by not collecting taxes on Internet sales to Illinois residents.

"In a time of soaring budget deficits and fiscal crisis in Illinois, precious tax dollars are being lost with a simple click of a mouse," Madigan said. "It’s time for this cyber tax evasion to end."

In January, Madigan took over similar lawsuits against five other stores, including Wal-Mart, Target and Viking Office Products.

Wait, there's more!
There's always more at AccountingWEB. We're an active community of financial professionals and journalists who strive to bring you valuable content every day. If you'd like, let us know your interests and we'll send you a few articles every week either in taxation, practice excellence, or just our most popular stories from that week. It's free to sign up and to be a part of our community.
Premium content is currently locked

Editor's Choice

WHAT KIND OF FIRM ARE YOU?
As part of our continued effort to provide valuable resources and insight to our subscribers, we're conducting this brief survey to learn more about your personal experiences in the accounting profession. We will be giving away five $50 Amazon gift cards, and a $250 Amazon gift card to one lucky participant.
This is strictly for internal use and data will not be sold
or shared with any third parties.