Illinois small business and collecting Internet sales tax

Illinois joined other states in passing legislation to collect sales tax from its residents who conducted online purchases from retailers outside the state. When that happened, many small business advertising affiliates were affected because online retail giants such as Amazon ceased doing business with those affiliates. This may be part of the reason why the Illinois Supreme Court recently invalidated the legislation.

As a result, many affiliates may return to the state, but this is also an opportunity for others to start an affiliate business here in Illinois. If that is the case, several steps need to be completed prior to opening the business. The first question would be where to form it.

Affiliates used to form their businesses outside of Illinois, but that is no longer required. It may actually be more advantageous for a small business owner here in our state to incorporate here. This also eliminates the need to register an outside business with the state, which essentially doubles a company's paperwork.

The next step is usually to obtain an Employer Identification Number (EIN). This is the tax identification number for the business entity that allows the business to do things such as open bank accounts. It may also be needed in order to obtain any applicable business licenses.

Other business and legal issues need to be resolved when starting a small business affiliate. It can be easy to miss an important detail in the excitement of starting a new business. It may not seem crucial at the time, but it could cause problems in the future. Taking the time to make sure all of the initial issues are taken care right away can give a small business owner more time to focus on opening the doors and planning for success.

Source:, What the Strike Down of the Amazon Tax Law Means for Illinois Affiliates, Nellie Akalp, Oct. 31, 2013

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