News Brief: Judge Strikes Down Illinois Affiliate Nexus Tax Law

Today marked a big victory for the affiliate industry. Judge Robert Lopez Cepero of the Illinois Circuit Court issued a ruling that finds the Illinois Affiliate Nexus Tax unconstitutional. He went on to declare that nexus wasn’t established by the activity outlined in the statute. The case was originally filed by the Performance Marketing Association (PMA):

In addition, the Judge agreed with the PMA’s position that this statute is premature, given the Congressional moratorium related to Internet tax fairness.

The passage of the law led to the departure of several large affiliate companies in Illinois, including Coupon Cabin and Fatwallet, and constituted a net loss of tax dollars for the state. Following today’s announcement, PMA’s Executive Director, Rebecca Madigan, said, “We are thrilled with the outcome of today’s preceding and believe it paves the way for internet marketing affiliates to get back in business in Illinois…We commend Judge Cepero for his timely and thoughtful decision.”

Today’s decision will most likely be appealed by the state. But given the lack of interest in resolving the issue at a national level, at least until after the election, the courts appear to offer affiliates another path to success.