Illinois Case Update

Tue, 09/08/15
By: John Mackie, Partner

Potential Relief For Wineries Named As Defendants In Illinois Sales Tax Lawsuits If They Act By September 15. 

The Illinois Attorney General just proposed some much needed relief for out-of-state wineries (e.g., California wineries) in the questionable False Claims lawsuits in Illinois that allege failures to collect sales taxes on shipping charges. To seek immediate relief for currently affected wineries (i.e., current defendants), such wineries need to contact the Illinois Attorney General by September 15, 2015.   

The proposed new rule provides as follows: a party shipping wine to Illinois will not be liable for collecting sales tax on shipments where (i) the shipping charges are separately spelled out and differentiated from the price of the wine; (ii) there is an option available to pick up the wine on-site instead of having it shipped to Illinois; and (iii) there is no difference in the price of the wine depending on whether it is shipped to Illinois or purchased at the winery. 

The Illinois rule-making process takes 45 days in order for this new proposal to become law.  In the meantime, however, the proposed rule change has prompted the Attorney General to take another look at pending False Claim lawsuits to see if any of them should be dismissed if the winery can demonstrate compliance with these requirements.  (Any settled cases are not eligible.) 

It is important to emphasize, however, that in order to get this relief, the Illinois Attorney General is asking wineries that are already defendants in a pending False Claims lawsuit to submit proof by way of affidavits detailing that they are in compliance with the proposed rules by September 15, 2015. 

This action by the State of Illinois is welcomed and should put an end to bogus claims in the future.  Any currently named defendant should immediately contact their Illinois counsel and submit the required proof.  

For general questions regarding this development or about any other aspect of the Illinois False Claims lawsuits, please feel free to contact John Mackie, Managing Partner at the law firm of Carle Macke Power & Ross, LLP.

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