Illinois Affiliate Nexus Tax Declared Unconstitutional

Apr 25, 2012 (07:04 PM EDT)

Performance Marketing Association Wins Lawsuit; CEO Issues Statement

WHITING, Ind., April 25, 2012 /PRNewswire/ -- In March 2011, Illinois House Bill 3659 became law, aiming to require online retailers located outside of Illinois to collect use (sales) tax on transactions made by Illinois consumers. Under the law, online retailers who did not have physical storefronts or employees in Illinois would be forced to meet these burdensome tax collection obligations so long as they maintained relationships with Illinois website affiliates. Most online retailers terminated these relationships rather than be subject to the new law.

As a result, many thriving online affiliate marketing websites, including CouponCabin, were forced to relocate to nearby states to maintain business operations.

The Performance Marketing Association (PMA) subsequently filed a lawsuit challenging the constitutionality of the law, Illinois Circuit Court Case No. 2011 CH 26333. In a ruling issued today, the court has declared the law invalid and unconstitutional.

In response to the law being invalidated, Founder and CEO Scott Kluth issued the below statement:

"CouponCabin is thrilled to hear the news about the affiliate tax being declared invalid in Illinois. We are relieved that the 9,000 affiliates that were based in Illinois may now have the opportunity to operate in Illinois without jeopardizing their business relationships with online retailers. This ruling places the responsibility for a solution back where it belongs: in Congress. CouponCabin continues to strongly support a federal solution to the taxation of all online transactions. For now, CouponCabin is heads down on helping people save money."

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