Illinois’s ‘Discriminatory’ Sales Tax May Land in Hot Water

Illinois is cruising toward a legal challenge of its Wayfair-inspired laws after the state’s General Assembly finished a short and speedy legislative session without fixing the so-called “Associated Industries problem.”

Here’s the backstory: Illinois passed a law last spring making remote sellers subject to the local retailer’s occupation tax (ROT), rather than the use tax, giving local governments their slice of the Wayfair pie. The law, however, sets up a potentially discriminatory tax scheme that the U.S. Supreme Court has already declared unconstitutional.

Illinois’s law requires out-of-state sellers to collect and remit the destination-based ROT, but it permits sellers ...