By Rich Lindblom
The conclusion of a two-part series.
If you read the first part of this story, you will recall that we left off with me getting a response from the Illinois Department of Revenue about the issue of several Illinois Big Box retailers not charged sales tax on certain appliances if they installed the appliances for the customer. Getting that email was a great feeling, it seemed like I was actually getting some traction on this issue.
As time passed, I checked back in with this person about once a month just to see if there was any progress and to make sure this issue hadn’t been forgotten. He assured me that he was working on it and would keep me advised of any developments in the matter.
In June of 2015, I got an email from this person along with a copy of what the Illinois Department of Revenue was calling a Compliance Alert. It was a two-page document that was being sent to every single appliance retailer in the state which spelled out exactly how the sales of installed appliances was to be treated from a tax standpoint and that was exactly how my company had been doing it for over fifty years. I was ecstatic to learn that the Illinois Department of Revenue was going to finally make it a fair fight between my company and the five Big Box retailers who were not collecting sales tax.
There was only one problem, after a few months’ time, nothing had changed. These Big Box retailers still were not charging sales tax. They had apparently chosen to ignore the Compliance Alert and carried on with business as usual. My brother and I were left with no choice but to pursue a legal route instead. A few months later, we filed a qui tam lawsuit on behalf of the State of Illinois against all five of these Big Box retailers. What started out as one large lawsuit was eventually broken up into five individual cases, one against each of the retailers. Both Sears and HH Gregg filed for bankruptcy which put an end to our lawsuits against them. So we pushed forward against the remaining three retailers.
Having never been a party to a lawsuit of any kind before, I had no idea what to even expect. The legal process is slow and methodical. There are motions and filings and for every one of them the opposition gets to respond. Basically everything takes time. But, we did get our day in court with Lowes in October of 2019. The trial lasted three days and then all we could do was to wait for a ruling.
Then along came Covid-19 … Before a ruling was issued by the judge (it was a bench trial, not a jury trial), the pandemic struck and threw the entire judicial system for a loop. While the delay in getting a ruling was long, it was also fully understandable due to the pandemic situation. Finally, on March 31, 2021 our six years’ worth of hard work and patience was justified when the judge issued a ruling in our favor … He found Lowes guilty of intentionally failing to collect sales tax.
As I write this story, we are awaiting a ruling on the damages in the case, basically how much money Lowes will have to pay the State of Illinois in back taxes, damages and interest. As for our still pending cases against both Best Buy and Home Depot, we are anticipating going to trial against Best Buy early next year with a trial against Home Depot coming after that.
It was a long hard battle, but someone had to take up the fight and in the end right prevailed over might.
As a result, every BrandSource dealer in Illinois will likely begin selling more dishwashers and over the range microwave ovens. And the State of Illinois, which is in desperate need of tax revenue, will start getting its fair share of sales tax as well.
I always get a kick out of it when someone reaches out to me after reading one of my articles because it struck a particular chord with them. So if you have a question or comment (good or bad) about something I wrote about, please reach out to me at firstname.lastname@example.org, I’d love to hear from you – Rich