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.

You may like these other stories...

Legislation coming out of Washington just might reduce homeowners' burden for disaster insurance. It's a topic very much on everyone's minds since the mudslide in Oso, Washington. The loss of human life was...
Divorce is hard, and the IRS isn't going to make it any easier. The IRS generally says "no" to tax deductions that might ease the pain of divorce. In certain circumstances, however, you might be able to salvage...
IRS chief: New rule on the way for tax-exempt groupsIRS Commissioner John Koskinen told the USA Today on Monday that the agency will likely rewrite a proposed rule regulating the political activities of nonprofit groups to...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.