The Illinois Legislature approved a bill (H3659) that would expand sales and use tax nexus beginning July 1, 2011, by amending the definition of a “retailer maintaining a place of business in this State” to include a retailer having a contract with a person located in Illinois under which the person, for a commission based upon the sale of tangible personal property by the retailer, refers customers to the retailer by a link on the person's Internet website. The definition would also be amended to include a retailer having a contract with a person located in Illinois under which: (1) the retailer sells a substantially similar line of products as the person located in Illinois and does so using a similar name as that person; and (2) the retailer provides a commission to the person located in Illinois based on the sale. Similar changes would be made to the definition of a “serviceman maintaining a place of business in this State.” If Governor Pat Quinn signs H3659, the legislation would take effect immediately.
Nexus—Internet affiliates. The bill would amend the definition of a “retailer maintaining a place of business in this State” beginning July 1, 2011, to include a retailer having a contract with a person located in Illinois under which the person, for a commission or other consideration based upon the sale of tangible personal property by the retailer, directly or indirectly refers potential customers to the retailer by a link on the person's Internet website. This provision would apply only if the cumulative gross receipts from sales of tangible personal property by the retailer to customers who are referred to the retailer by all persons in Illinois under such contracts exceed $10,000 during the preceding four quarterly periods ending on the last day of March, June, September, and December.
The bill would make a similar change to the definition of a “serviceman maintaining a place of business in this State.”
Nexus—similar products. The bill would amend the definition of a “retailer maintaining a place of business in this State” beginning July 1, 2011, to include a retailer having a contract with a person located in Illinois under which: (1) the retailer sells the same or substantially similar line of products as the person located in Illinois and does so using an identical or substantially similar name, trade name, or trademark as the person located in Illinois; and (2) the retailer provides a commission or other consideration to the person located in Illinois based upon the sale of tangible personal property by the retailer. This provision would apply only if the cumulative gross receipts from sales of tangible personal property by the retailer to customers in Illinois under all such contracts exceed $10,000 during the preceding four quarterly periods ending on the last day of March, June, September, and December.
The bill would make a similar change to the definition of a “serviceman maintaining a place of business in this State.”
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