Gov. Pat Quinn signed legislation on Thursday to require online merchants with a physical presence in Illinois to collect and remit sales tax.
The controversial law, called the Main Street Fairness Act, means online retailers — including giant Amazon.com Inc. and Overstock.com Inc. — must collect sales taxes on purchases made by Illinois residents as long as the retailer has a physical presence in the state. The law is effective immediately.
The move is expected to have little effect on consumers’ online shopping habits, but deals a blow to small businesses that count the giant retailers as a major source of ad revenue.
Amazon and Overstock.com said they would avoid collecting sales tax by stopping their affiliation with Web site companies in Illinois that direct traffic to Amazon and Ovestock. Under the new law, online retailers are deemed to have a presence in Illinois if they have a contract with an affiliate based in here.
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