Pub. 9 2019 Issue 1

8 AUTOMOBILE DEALER NEWS ILLINOIS www.illinoisdealers.com COUNSELOR’SCORNER F ollowing the recent United States Supreme Court’s seminal decision in South Dakota v. Wayfair, Inc., the circum- stance of an Illinois motor vehicle dealer’s out-of-state sales and use tax obligations appears to be evolving. This ruling impacts retailers, large and small, including franchised dealers. In handing down its decision, the Court overruled prior judicial precedent in National Bellas Hess, Inc. v. Department of Revenue of Illinois, and Quill Corp. v. NorthDakota, which previ- ously held that a state could not require an out-of-state seller with no physical presence in that state to collect and remit sales taxes on goods the seller ships to customers in that state. Remarkably, the Wayfair Court ruled that states may assert nexus (physical presence) and require sellers with no physical presence in the state to collect and remit sales and use tax for goods sold within the state. Under this ruling, retailers may be subject to the local sales tax laws in states where they make sales of any tangible personal property across state lines, regardless of whether that retailer has any physical presence in that state. In theWayfair case, the State of South Dakota claimed to have annual multimillion dollar losses in sales and use tax revenues due to increasing internet transactions and out-of-state retailers doing business with South Dakota residents. To address this loss of revenue, South Dakota enacted a sales tax law requiring an out-of-state retailer with gross revenue derived from sales of tangible personal property in South Dakota of over $100,000, or United States Supreme Court Ruling and Its Impact on Illinois Dealers’ Sales and Use Tax Obligations BY JULIE CARDOSI, LAW OFFICE OF JULIE A. CARDOSI, P.C.