Illinois Supreme Court Throws Out "Amazon Tax"

6-1 ruling

The Illinois Supreme Court threw out a state law Friday that taxes certain Internet sales, saying the so-called "Amazon tax" violated federal rules against "discriminatory taxes" on digital transactions.

The 6-1 ruling represented the first time a court had invalidated an Internet sales tax law among 18 states that have them. It brought an immediate cry from traditional, store-based retailers for Congress to step into regulating taxes on web sales.

The court determined that Illinois' 2011 "Main Street Fairness Act" was superseded by the federal law, which prohibits imposing a tax on "electronic commerce" and obligates collection that's not required of transactions by other means, such as print or television.