Important Alert – Illinois Nexus Tax Law Ruled Void and Unenforceable

Today, the Illinois Supreme Court ruled in the favor of the PMA (Performance Marketing Association), of which ShareASale is a Charter Member.

The “Affiliate Nexus” or “Amazon” Tax is now null and void in Illinois.

The ruling by the Illinois Supreme Court that Public Act 96-1544 is “void and unenforceable” results in a judicial finding that the statute was never legally valid and, therefore, it is not currently in effect.  This means that advertisers are free to reinstate their Illinois affiliates whose contracts were terminated out of fear of the “click through” nexus law.  Of course, advertisers must still be wary of any additional activity that may be conducted by web affiliates on their behalf, such as active solicitation of prospective customers and other in-state promotional efforts.  The court ruling does not displace, or supersede, traditional, physical-presence nexus standards.

The Illinois Supreme Court, in a 6 to 1 decision, agreed with the PMA’s argument that the Illinois web affiliate nexus statute (Public Act 96-1544) was preempted by federal law and is therefore “void and unenforceable.” 

Displaced affiliates can move back to Illinois without being concerned that the statute, which has now been declared void by the state’s highest appellate court, will cause them to create a sales tax collection obligation for out-of-state advertisers.  

The full decision can be read here.