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Eyes on Ecom Law

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Court Rules that the Illinois Internet Affiliate Nexus Law is Unconstitutional and Violates the Internet Tax Freedom Act

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Yesterday (April 25, 2012), Judge Robert Lopez Cepero of the Illinois Circuit Court for Cook County granted summary judgment in favor of the Performance Marketing Association (“PMA”) in its constitutional challenge to the Illinois “Internet affiliate nexus” statute, Public Act 96-1544 (the “Act”), which took effect in July 2011. Judge Cepero ruled from the bench,...

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Internet Retailers and Digital Businesses Should Understand the State Tax Risks Associated with Telecommuting Employees

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In the increasingly “officeless” environment of the digital workplace, Internet retailers, cloud computing providers and other remote sellers should be aware of the sometimes unexpected state tax consequences associated with employees who telecommute. Although there are few reported court decisions, a vast majority of the states assert that having employees located in the state engaged...

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Federal Court Declares Colorado Use Tax Notice and Reporting Law Unconstitutional

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Good news for Internet retailers and other direct marketers. Last Friday, March 30, 2012, Judge Robert Blackburn of the Federal District Court for the District of Colorado, entered summary judgment in favor of the Direct Marketing Association (DMA) in its suit challenging a 2010 Colorado notice and reporting law. The Court declared the law unconstitutional...

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What is an “Affiliate Nexus” Statute?

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Some of you may have read the headline in CCH’s State Tax Day on March 27, 2012, “Affiliate Nexus Bill Enacted,” and wondered whether this describes yet another state that provides that nexus is established by virtue of a link from a web site “affiliate” to a remote seller’s web site. The State Tax Day...

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Are You Minding The Store? Executives Held Personally Liable For Unreported Sales Tax

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Two recent decisions provide an important reminder for executives and tax managers of Internet retailers and remote sellers: Make sure that you: (1) understand your company’s sales and use tax obligations; (2) have a defensible position on state tax issues; and (3) pay attention to notices from state revenue departments, including those that come from...

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Obama Administration Releases Consumer Privacy Bill of Rights

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In April 2011, Senators Kerry and McCain introduced a bill entitled the “Commercial Privacy Bill of Rights.” As discussed in this space, the bill would have required online collectors of information to permit individuals to opt out of the collection of information about browsing and shopping activities and required affirmative consent (opt-in) for the collection...

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More Cautionary Tales of State Tax Laws With Retroactive Effects

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We have written before about retroactive tax laws, but there is reason for concern that the phenomenon of states resorting to retroactivity may be on the rise. In the most recent case to wind its way to the end of the state appeal process, the Michigan Court of Appeals upheld a statute that amended Michigan’s...

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Pennsylvania DOR Puts Constitutionally-Suspect Affiliate Nexus Interpretation on Hold

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On January 27, 2012, the Pennsylvania Department of Revenue delayed until September 1, 2012 the enforcement of its recently announced (and legally questionable) position regarding affiliate nexus. We have written frequently about state affiliate nexus statutes and proposed legislation, as well as the challenge brought by our client, the Performance Marketing Association (“PMA”), against the...

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Unclaimed Property Laws Often Go Overlooked by E-Marketers, But Many States Are Aggressively Enforcing Them

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One set of legal obligations that are often overlooked by Internet sellers arise under states’ “unclaimed property” laws, sometimes referred to under the arcane label of “escheat.” Black’s Law Dictionary defines escheat as “the preferable right of the state to an estate left vacant, and without there being any one in existence able to make...

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Storm Clouds on the Horizon for Direct Marketers Regarding Required Use Tax Collection

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After the introduction in July 2011 of the “Main Street Fairness Act” by three senators from the Democratic Party, federal legislation intended to eliminate the Quill physical presence requirement for state sales and use tax collection has gathered increased support. A group of 10 Senators from both sides of the aisle introduced the “Marketplace Fairness...

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