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Judge throws out Illinois ‘Amazon tax’

An Amazgift card.  |  FILE PHOTO

An Amazon gift card. | FILE PHOTO

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Updated: May 28, 2012 9:00AM

A Cook County judge has ruled against a state law that requires and other Internet companies to collect sales taxes on transactions with Illinois customers.

Judge Robert Lopez Cepero ruled Wednesday that the law isn’t enforceable because there is a federal Internet tax moratorium through 2014, according to Crain’s Chicago Business . Cepero also found that just because a company has an affiliate in Illinois doesn’t mean it has enough of a presence for tax purposes.

The Illinois law, called the Main Street Fairness Act, requires Internet retailers without stores in Illinois to collect the state’s 6.25-percent sales tax on purchases from Web-based partners that have operations here.

Previously, those Amazon or partners — or affiliates — didn’t have to collect the state sales tax as a local store selling the same product must, creating a price advantage for the online retailer.

The 2011 law prompted some affiliates of websites such as to relocate out of Illinois.

The Los Angeles-based trade group Performance Marketing Association brought the lawsuit. The group called the ruling “a victory.” The Illinois Department of Revenue said it “respectfully” disagrees with the judge’s ruling and is reviewing appeal options.

— The Associated Press

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