New rules help Illinois collect out-of-state sales taxes

SPRINGFIELD, Ill. (AP) - The state of Illinois' Department of Revenue has new rules this year to target the collection of sales taxes from out-of-state businesses.

The new rules that took effect Jan. 1 expand the definition of out-of-state retailers that must register in Illinois and collect sales taxes, according to The (Springfield) State Journal-Register (http://bit.ly/1BVc3Cd ).

State lawmakers revised the rules last year after the Illinois Supreme Court ruled that previous rules singled out online sellers, violating federal laws. The new rules dropped the word "Internet" and now cover catalog, mail-order and similar retailers along with online sellers. Companies are covered if they have sales of $10,000 or more in the prior year.

Out-of-state sellers have a month to adjust to the new rules.

Illinois' brick-and-mortar businesses say not collecting the taxes gives out-of-state retailers an advantage.

"It's an attempt to level the playing field," said Rob Karr, who is president and CEO of the Illinois Retail Merchants Association.

A University of Tennessee report for the National Conference of State Legislatures found unpaid sales taxes in Illinois amounted to an estimated $1 billion in 2012.

Performance Marketing Association of California successfully challenged the previous Illinois law. Its president, Brian Littleton, said the new Illinois definition of an out-of-state seller is still too broad.

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Information from: The State Journal-Register, http://www.sj-r.com