January 2021 Update: The Leveling the Playing Field for Illinois Retail Act
In Illinois, " The Leveling the Playing Field for Illinois Retail Act" became effective on January 1, 2021.
- This act introduces changes in sales tax collection for remote sellers and marketplace facilitators.
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The changes require remote sellers and marketplace facilitators to collect and remit the state and locally-imposed Retailers’ Occupation Tax (ROT) for the jurisdictions where the product is delivered (destination sourcing) rather than collecting and remitting solely the state use tax.
What's changing?
For all interstate transactions completed on or after January 1, 2021 for sellers without a physical presence in Illinois (remote sellers), our system will now treat these sales with destination-based sourcing logic so that all state and local taxes are calculated correctly.
- Previously all Illinois transactions in Illinois were calculated at the origin-based rate.
- TaxJar API calculations and your TaxJar Reports have been updated to reflect these new changes.
For intrastate marketplace transactions completed on or after January 1, 2021, will be handled as marketplace sales.
- Intrastate marketplace transactions completed during the 2020 calendar year will retain the current tax logic and not be treated as marketplace.
- TaxJar API calculations and your TaxJar Reports have been updated to support these new changes.
- If you're enrolled in AutoFile, please note no changes need to be made - AutoFile supports these changes automatically.
- If you are not enrolled in AutoFile, you will need to contact the IL state directly to add or activate an ST2-Form. We have these details here when you enroll in AutoFile for Illinois.
You can read more on the state's website here.
If you have more questions specific to your business, TaxJar does not provide legal advice. We always recommend consulting directly with a state's DOR or with a state & local tax expert (SaLT) for further guidance based on your particular business needs.