The court upheld previous rulings by the Circuit Court of Cook County on the law that was meant to even out the sales tax between online firms and brick-and-mortar companies that complain their online competitors have an unfair price advantage by not having to charge sales tax.
States, essentially, are trying to work around the concept of applying a sales tax only to companies that have a physical presence in their state.
Many states have tried to extend the definition of having a physical presence in the state by including business affiliates.
A retailer, like Amazon, for example, could have operations and offices in one state, but affiliate themselves with local companies of other states that offer Web links back to Amazon.
"Because we agree with the circuit court's conclusion that the relevant portions of Public Act 96-1544 are preempted by federal law, we affirm the judgment of the circuit court," the Supreme Court said in a 22-page ruling.