Illinois Click-Through Legislation Preempted by Federal Law.

DALLAS, Oct. 29, 2013 /PRNewswire/ --  The Supreme Court of Illinois recently affirmed a lower court's ruling that the state's click-through nexus legislation was preempted by a federal law governing taxes placed on electronic commerce.

In 2011, the Illinois General Assembly enacted Public Act 96-1544,1 which added new click-through nexus legislation and sought to tax a common contractual arrangement known as "performance marketing." In performance marketing, an online retailer contracts with an individual to place hyperlinks for a retailer's website in consumer-targeted or high-volume areas, as a means for creating online presence and directing potential customers to the retailer's website. Illinois's legislation sought to establish nexus with retailers making more than $10,000 per year through performance marketing relationships.

The Performance Marketing Association, Inc. ("PMA") filed a complaint against the representative for the Illinois Department of Revenue, seeking declaratory and injunctive relief from the click-through nexus element in Public Act 96-1544. The circuit court of Cook County sided with PMA, finding that the click-through nexus legislation was preempted by the Internet Tax Freedom Act (ITFA),2 which prohibits "multiple discriminatory taxes on electronic commerce." Accordingly, the circuit court granted PMA's motion for summary judgment.

On October 18, 2013, the Supreme Court of Illinois affirmed the circuit court's denial of summary judgment to the Department of Revenue, and its grant of summary judgment to PMA.3

About Ryan
Ryan is an award-winning global tax services firm, with the largest indirect and property tax practices in North America and the seventh largest corporate tax practice in the United States. Headquartered in Dallas, Texas, the Firm provides a comprehensive range of state, local, federal, and international tax advisory and consulting services on a multi-jurisdictional basis, including audit defense, tax recovery, credits and incentives, tax process improvement and automation, tax appeals, tax compliance, and strategic planning. Ryan is a three-time recipient of the International Service Excellence Award from the Customer Service Institute of America (CSIA) for its commitment to world-class client service. Empowered by the dynamic myRyan work environment, which is widely recognized as the most innovative in the tax services industry, Ryan's multi-disciplinary team of more than 1,600 professionals and associates serves over 9,000 clients in 40 countries, including many of the world's most prominent Global 5000 companies. More information about Ryan can be found at www.ryan.com.

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TECHNICAL INFORMATION CONTACT:

Jeremiah T. Lynch
Principal
212.871.3901 
jeremiah.lynch@ryan.com

1 Illinois Public Act 96-1544 (effective March 10, 2011).
2 47 U.S.C. Section 151 note (2000).
3 Performance Mktg. Ass'n v. Hamer, 2013 IL 114496 (October 18, 2013).

Available Topic Expert(s): For information on the listed expert(s), click appropriate link.
Jerry Lynch 
https://profnet.prnewswire.com/Subscriber/ExpertProfile.aspx?ei=113520

SOURCE Ryan, LLC



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