Illinois - State Supreme Court holds click-through nexus law is preempted by Internet Tax Freedom Act 

October 18:  The Illinois Supreme Court today held that the state’s click-through nexus statute was void and unenforceable. In the majority’s view, the statute constituted a discriminatory tax on electronic commerce, and is thus prohibited under the Internet Tax Freedom Act. Performance Marketing Ass’n, Inc. v. Hamer, Doc. No. 114496 (Ill. October 18, 2013)

Read the high court’s decision [PDF 151 KB] including a dissenting opinion.


In March 2011, Illinois’ use tax and service use tax laws were amended to adopt click-through nexus provisions applicable to certain retailers.


In 2012, a state circuit court judge found that a relationship with in-state residents was insufficient to create substantial nexus with Illinois, and that the click-through nexus provisions ran afoul of the Internet Tax Freedom Act (IFTA).


Today, the Illinois Supreme Court affirmed the circuit court’s finding that the click-through statute was preempted by the ITFA and, therefore, was void and unenforceable.


Read an October 2013 report [PDF 198 KB] prepared by KPMG LLP with more information about today’s decision.




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