Tax law prompts Amazon and Overstock to sever ties with Illinois-based retailers

March 11, 2011

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Illinois' new law isn't sitting well with some Internet businesses. Some online retailers say they're cutting ties with their Illinois-based partners.

Governor Pat Quinn signed off on a plan this week that requires online stores to collect state sales tax. Previously, Illinois consumers had to pay the tax directly to the state, but few people did. Today, Amazon.com and Overstock.com say they're breaking off from Illinois-based retailers.

Amazon says they'll stop working with Illinois businesses on April 15th, and Overstock plans to stop on May 1st. Both companies call the new law unconstitutional.

Some Illinois-based retailers have said they'd move their businesses to a different state if companies like Amazon and Overstock severed their relationships.

In a statement Governor Quinn's office says it would welcome the companies back if they abide by the new law.