Whistleblower Lawsuits on Sales Tax for Delivery Charges

This document is a legal update discussing the implications of recent whistleblower lawsuits targeting online retailers in Illinois for failing to collect sales tax on shipping and delivery charges. It outlines the background of the issue, referencing a 2009 Illinois Supreme Court ruling that established sales tax applicability to certain shipping charges. The update details the Illinois False Claims Act, which allows private individuals to sue on behalf of the state, incentivizing whistleblowers with a percentage of the recovered damages. The potential penalties for non-compliance are significant, including treble damages and civil penalties for each fraudulent act. The document advises retailers to review their sales tax collection practices, particularly concerning shipping charges, and suggests legal consultation for those facing lawsuits. It also notes that similar whistleblower statutes exist in other states, indicating a broader risk for retailers across the country regarding sales tax compliance on delivery charges.