wingslevel - 3:22 am on Jan 10, 2011 (gmt 0)
Here's how it works. The constitution forbids states from regulating interstate commerce, so they can't charge sales tax on goods shipped in from out of state. If, however, the merchant had a presence in the state (called a nexus), then the state could tax the sale. In the case of amazon, they claim no nexus in Illinois, so they currently do not collect any sales tax on sales of product destined to that state. Illinois is trying to claim that, by virtue of having associates in Illinois, amazon has established nexus and must, therefore, collect sales tax and remit it to Illinois. So, by terminating their associates, amazon will no longer have a nexus and will not have to charge the tax. Make sense?