Justia Illinois Supreme Court Opinion Summaries

The ability of consumers to make purchases on the internet from out-of-state merchants without paying Illinois sales or use taxes caused Illinois retailers to ask the legislature to “level the playing field.” The result was a taxing statute, Public Act 96-1544, effective in 2011, called the “click-through” nexus law. The law was challenged by a group of internet publishers that display website texts or images, such as a retailer’s logo, containing a link to a retailer’s website; they are compensated by the retailer when a consumer clicks on the link and makes a purchase from the retailer. Out-of-state retailers who use such arrangements to generate sales of over $10,000 per year become subject to taxation under the statute. Their challenge was based on the federal Internet Tax Freedom Act, 47 U.S.C. 151, which prohibits discriminatory taxes on electronic transactions, and the commerce clause of the U.S. Constitution. The Illinois Supreme Court held that the statute is invalid. The court noted that such marketing, when conducted through print media or on-the-air broadcasting, does not give rise to tax obligations under the Illinois statute. The enactment is a discriminatory tax on electronic commerce within the meaning of federal law, which preempts it. The court did not reach the commerce clause issue. View "Performance Mktg. Ass'n, Inc. v. Hamer" on Justia Law

Plaintiff and defendant, both women, met in 2005 through a chatroom connected with a television series. Defendant, in Illinois, used her own name and aliases to communicate with plaintiff, in Los Angeles. One alias was that of a man, and a romantic relationship developed through the Internet, telephone, and mail. Defendant disguised her female identity using a voice-altering device. Plaintiff purchased airline tickets for a meeting in Denver, but her new “boyfriend” cancelled the plans. Plaintiff was informed that he had attempted suicide. In 2006 the two planned to live together in Colorado, but defendant subsequently informed plaintiff, using another alias, that the man had died of cancer. The deception continued for seven more months until plaintiff’s real friends confronted defendant and obtained a videotaped admission as to what had occurred. Plaintiff’s third amended complaint, alleging fraudulent misrepresentation and seeking damages for the cost of a therapist, lost earnings, and emotional distress, was dismissed. The appellate court affirmed, holding that claims made in the previous complaint, but not incorporated into the third amended complaint, had been abandoned. The supreme court affirmed, holding that a claim for fraudulent misrepresentation does not apply to a personal relationship with no commercial component. View "Bonhomme v. St. James" on Justia Law

The U.S. Court of Appeals for the Seventh Circuit, considering a suit by the city to collect taxes from a ticket reseller, requested a determination of whether municipalities may require electronic intermediaries to collect and remit amusement taxes on resold tickets. The Illinois Supreme Court held that state law preempts such a tax. The state has a long history of protecting consumers and has regulated auctioneers for more than 10 years and ticket resales for 20 years; it has regulated scalping in some form since 1923. The statutory scheme, and the debates which produced the Ticket Sale and Resale Act (720 ILCS 375/0.01) evince an intent to allow internet auction listing services to opt out of any obligation regarding local tax collection. The city overstepped its home rule authority. View "City of Chicago v. Stubhub" on Justia Law