Illinois Sales / Use tax: Inseparable shipping charges for items purchased on-line are taxable

Kean v. Wal-Mart Stores, Inc., Ill. (11/19/09). The Illinois Supreme Court affirmed the dismissal of a putative class action suit brought by online purchasers of a national retailer's website, finding that the shipping charges for items purchased on its Internet website were subject to sales tax as a matter of law. The petitioners complained that they were wrongfully charged sales tax on the shipping charges for items they had purchased on the Internet and had delivered to them.

The Court agreed that the shipping charges at issue were inseparable from the base purchase price, due to the fact that the online transactions could not be completed on the Internet without specifying a delivery location and agreeing to pay the shipping charges.