Illinois Remote and Online Seller Tax Rules

Learn about the remote seller tax rules for Michigan.

Illinois is one of a number of states that has enacted regulations that allow the state to collect sales tax from online retailers who sell to Illinois customers, regardless of whether the seller has a physical presence in the state. These regulations were made possible after the Supreme Court's decision in South Dakota v. Wayfair Inc., overturning a long established rule that states could only require retailers with a physical presence in the state to collect sales tax from sales to customers located in their state.

Illinois’s New Rules on Collecting Sales Tax

Effective October 1, 2018, remote sellers whose sales in Illinois exceed certain thresholds must register with the state, collect sales tax, and remit the tax to the state. Remote sellers are retailers that make sales from locations outside of Illinois. This includes retailers who don’t have a physical presence in the state but do sell tangible personal property to Illinois purchasers.

Under the new rules, remote sellers must register with the state and collect Illinois sales tax once their sales in the previous four calendar quarters exceed:

  • $100,000 in cumulative gross receipts of tangible personal property to purchasers in Illinois, or
  • 200 separate transactions for the sale of tangible personal property to purchasers in Illinois.

Remote sellers must determine on a quarterly basis whether they are required to collect Illinois sales tax. After any quarter when the seller meets either of the above thresholds for the preceding twelve-month period, that seller must register with the state and begin collecting sales tax. The seller must collect and remit sales tax for at least the next twelve months starting with the next quarter.

Example. A remote seller first meets one of the thresholds during the twelve-month period ending March 30, 2019. That seller must collect and remit sales tax from April 1, 2019 until at least March 30, 2019.

How to Register and Collect Sales Tax

Remote sellers in Illinois can register online through MyTax Illinois. There is no charge to register. Choose the “Registration” button from the homepage, click on the link to register a new business, and then proceed through the steps to complete the online application. Note: Illinois is not one of roughly two dozen states that participate in the Streamlined Sales and Use Tax Registration System.

For more information, see the Illinois Department of Revenue website. Be sure to check the Latest News section for any updates to the Department’s use tax guidance or new FAQs regarding internet sales tax.

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