Illinois Lawmakers Consider Ways To Collect Tax from Internet Sales

Jim Anderson -- Illinois Radio Network

The state is losing million in tax that it should be collecting to people who buy stuff online and don't pay.

This is according to State Sen. Pam Althoff (R-McHenry), noting that internet businesses that don't have any facilities in Illinois are not required to collect sales tax.

"There are numerous entities in the internet world who sell products, and we cannot collect that sales tax, and that is estimated, possibly, conservatively, to bring in an additional $500 million (per year) today, and (that) grows every year as more and more people choose to purchase product off the internet," she said.

The buyers are supposed to pay the tax on their state income tax return, but who knows what compliance is. Althoff is for a federal law to require all internet sellers to collect tax, and is working with U.S. Sen. Dick Durbin (D-Ill.), who has been on the issue for years. It's not a new tax, they insist, since the tax is already on the books, but there's no mechanism for consistent collection.

Meanwhile, State Sen. Dan Kotowski (D-Park Ridge) says the state's corporate tax should be restructured, because as it is, small- and medium-sized businesses pay it, while big companies avoid it.