Wineries that ship to customers nationwide are among the latest targets of a Chicago attorney who has developed a lucrative freelance enforcement niche. Steven Diamond and his firm of Schad, Diamond and Shedden “have filed hundreds of suits against various companies in industries such as cookware, flowers and motorsports” and more recently beverage makers under “an Illinois law that requires businesses to collect sales taxes for the state, not only on what they sell, but on shipping-and-handling charges. A whistleblower rule allows anyone within the state to sue in the name of Illinois and collect any recovered funds.” [Wine Spectator] While a number of other states also tax shipping charges, Illinois authorities, unable to agree on how to interpret a relevant decision by their state’s high court, have given conflicting guidance on when taxes are owed. [Wines and Vines, Tom Wark, Schiff Hardin, WTAX]
P.S. Related on the practice of tax farming in the Roman Empire and pre-Revolutionary France, and latter-day parallels, here, here, and here.
5 Comments
Interesting.
Why buy anything from Illinois?
Mike,
My guess is that the buyers are in Illinois and the sellers are not.
Cheers.
This is about sales to residents of Illinois.
Thanks for the clarification. My computer software blocked access to the Wine Spectator story, for some reason.
I am trying to figure out why shipping and handling from an out of state vendor is collected by Illinois at all.
The “handling” costs are for labor within the state where the item is shipped from. What right does Illinois have to tax labor in another state?
The “shipping” costs are generally for materials and the cost of the shipping paid to the shipping agent. The taxes on the materials and the actual fees of the shipping paid by the vendor are done in another state. What right does Illinois have to essentially say they are going to tax a transaction which did not occur in their state and for which the company has already paid taxes?