CHICAGO — An Illinois law aimed at leveling competition between online and brick-and-mortar retailers while collecting more state sales taxes is unconstitutional, the state supreme court ruled Friday, upholding a Cook County judge’s decision.
The opinion is another shot in the highly contentious nationwide battle over who should collect online sales tax and how.
Consumers who live in sales-tax states owe state sales tax on their Internet purchases, whether they pay it during virtual checkout or when they file their state income tax returns. But few pay unless the tax is collected at checkout. That has the effect of making online purchases cheaper than those at bricks-and-mortar retailers.