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Urgent Message from the OWA: Illinois Tax Scam
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Dear colleagues,
The Oregon Winegrowers Association is following up on our earlier communication regarding the Chicago law firm ofStephen B. Diamond, P.C. that has been ordering wine for delivery at its Illinois law offices in order to identify wineries that are not charging and remitting sales and use tax on the shipping cost and filing suit against them.

The lawsuits are possible because of a peculiarity of Illinois law, a so-called “whistleblower” provision that the firm has used successfully to collect fees and penalties from businesses throughout the country—even though Illinois state officials are on record as disagreeing with both the firm’s interpretation of the law and its opportunistic approach.The firm’s efforts to date have resulted in profitable settlements with online wine sellers because the exposure to potential penalties --on shipments going back as far as six years-- makes settlement often cheaper than litigation.

This month Oregon wineries have started to receive summonses from lawsuits filed by Stephen B. Diamond, P.C. for failure to charge and remit sales and use tax on the shipping cost.If you have shipped to anyone at332 South Michigan Avenue, Chicago, IL 60604your business could be at risk.

It is the view of our legal counsel at
Davis Wright Tremaine LLPthat while the relevant Illinois laws do not require wineries to collect and remit sales and use tax on transportation charges into Illinois, the reasonable concern about potential exposure to claims and a desire to see the lawsuits halted implies that regardless of legal interpretation wineries should be conservative when shipping into Illinois.

Here are steps you can take to protect your business:
1)if you are not already doing so, you should collect and remit sales tax on Illinois transportation charges.If transportation charges are built into your sales price, you are probably already paying sales tax on transportation charges;2)cancel or refuse any delivery to 332 South Michigan Avenue, Chicago, IL 60604.

The Oregon Winegrowers Association is working to push back on these nuisance claims on behalf of the Oregon wine industry and we invite your participation if you have been affected or have shipped to this law firm. Please contact the
OWA or our legal counsel Cary Greeneat Davis Wright Tremaine LLP if you receive a summons or are contacted by Stephen B. Diamond, P.C. for any reason.

We strongly encourage you to contact us before reaching any settlement or with any questions or concerns.


Ellen Brittan
OWA President

4640 SW Macadam Ave
Suite 240
Portland, OR 97239
(503) 228-8336

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