In an effort to “Level the Playing Field” between In-State and Remote Retailers, beginning January 1, 2021, Remote Retailers and Marketplace Facilitators will be subject to the collection of Illinois Retailers Occupation Tax (ROT) on sales of tangible personal property when meeting certain thresholds.
Under these new changes, remote sellers that make 100% of their sales into Illinois through a Marketplace Facilitator will not be considered the retailer for tax assessment purposes. Instead, the Marketplace Facilitator will be considered the retailer and incur ROT at the purchaser’s location (destination rate).
Marketplace Facilitator sales will be assessed according to the three factors outlined below:
- Sales made within Illinois will be assessed ROT according to the location of the sales activity
- Sales made outside Illinois, but fulfilled from inventory located within Illinois, will be assessed ROT according to the location of the inventory
- Sales that are both made and fulfilled outside of Illinois will be assessed ROT according to the purchaser’s location (destination rate)
Remote sellers will need to continue to monitor Illinois economic nexus thresholds when exceeding $100,000 gross receipts or 200 or more separate transactions to Illinois residents.
Please reach out to Thompson Tax for further assistance or questions regarding this sales tax change.