CHICAGO – March 10, 2011. Governor Pat Quinn today signed legislation to require all companies doing business in Illinois to collect and remit the legally required sales taxes. House Bill 3659 – the Mainstreet Fairness Bill – was a bipartisan initiative that passed both houses of the General Assembly with overwhelming support.
“Illinois’ main street businesses are critical to ensuring our long-term economic stability, which is why they must be able to compete with every company doing business online in Illinois,” said Governor Quinn. “This law will put Illinois-based businesses on a level playing field, protect and create jobs and help us continue to grow in the global marketplace.”
The law, sponsored by Rep. Patrick Verschoore (D-Rock Island) and Senate President John Cullerton (D-Chicago), will require all online retailers who contract with an “affiliate” in Illinois to collect sales tax on customer purchases and remit it to the Illinois Department of Revenue (IDOR). Illinois currently collects sales tax revenue from the more than 20,000 retailers with physical locations in the state, including online and catalog sales from these vendors.
“Illinois retailers are crucial components of our state economy and our local communities. We need to ensure that those businesses are not at a disadvantage in our modern marketplace. I believe this law is an important step in leveling the playing field for Illinois businesses,” said President Cullerton.
“As more consumers decide to do their shopping online, we must make sure that our local businesses are competing on a level playing field with online retailers,” said Rep. Verschoore. “I would like to thank Governor Quinn for signing this law, which will help Illinois businesses stay competitive.”
“The Illinois Retail Merchants Association proudly stands with Governor Pat Quinn today as he signs House Bill 3659 into law,” said David Vite, president of the Illinois Retail Merchants Association. “This puts Illinois as a national leader in restoring fairness – fairness for retailers, fairness for the economy but most importantly, fairness for taxpayers. No taxpayer should be punished because out-of-state companies won't play by the rules. Thanks to the leadership of the legislature and the Governor's action today, we can all rest easier knowing that the right policy prevailed and everyone is now on an even playing field.”
Illinois law currently requires taxpayers and businesses to report and pay sales tax on items purchased from retailers that do not collect sales tax on their behalf. The Illinois Department of Revenue (IDOR) estimates that between $153 million and $170 million in sales tax revenue per year goes uncollected, as individuals and businesses are unaware of or avoid their obligation to pay sales tax on such items.
“It’s a matter of fairness. Stores and businesses located in Illinois employ Illinois workers, support community programs, and, through the property, income and sales taxes they pay, allow us to provide vital public services,” said Brian Hamer, Director of Revenue. “Online merchants with affiliates in Illinois should be required to remit the same taxes.”
“I want to thank Governor Quinn for signing this bill. His action has helped independent bookstores like mine, and thousands of Main Street retailers all across the state,” said Becky Anderson, co-owner of Anderson’s Bookshops. “Illinois businesses will no longer be penalized simply for complying with sales tax laws. This is going to help retailers expand and create jobs.”
At the request of Governor Quinn, the Alliance of Main Street Fairness (AMSF) has begun a website (www.standwithmainstreet.com) to help Illinois affiliates expand their customer bases. The Illinois Department of Commerce and Economic Opportunity (DCEO) will partner with the Illinois Retail Merchants Association and AMSF to provide growth opportunities, foster an environment to create more Illinois jobs and provide online shopping consumers with greater opportunities to save money.
The law is effective immediately.