Illinois sales tax filing update January 2020: Marketplace facilitator laws
Illinois has passed a law requiring marketplaces to collect and remit sales tax on sales facilitated through the marketplace effective January 1, 2020.
• Amazon, eBay, Etsy and Walmart began this collection on January 1, 2020.
Please review general information regarding marketplace facilitators and how your TaxJar sales tax reports support these changes here in our FAQ.
In this article, we summarize Illinois's state guidance on the following questions:
- Do I need to register for a sales tax license in Illinois?
- Should I cancel my existing registration if all my sales are marketplace-collected?
- Do I need to collect sales tax on Illinois sales on non-marketplace platforms?
- Do I still need to file returns in Illinois?
- How to file as a marketplace seller
I've never registered for an Illinois license. Do I need to register for a sales tax license in Illinois now?
If you are a retailer with a physical presence in Illinois or you are a remote seller who has crossed the economic nexus threshold for Illinois ($100,000/year in gross revenue, or more than 200 separate sales transactions in Illinois in the previous 12 months), then you will need to register for an Illinois sales tax license.
- If you've imported your sales across all platforms into your TaxJar account, you can determine if you have economic nexus in the state by running the Sales & Transactions Checker.
- If you do not meet any of the criteria that create nexus in Illinois (physical, economic or otherwise), you won't need to register for a sales tax license in this state.
I have already registered for a license in Illinois and all of my sales are marketplace-only sales. Should I cancel my existing registration?
- We always recommend checking directly with the state or a sales tax consultant who can provide more detailed advice specific to your business scenario prior to canceling your registration.
Do I need to collect taxes on my Illinois sales on other platforms?
Yes--if you have nexus in the state (physical or economic) and you make sales to customers in Illinois on platforms outside of the marketplace that is automatically collecting and remitting, you will also need to collect tax on your end on the Illinois orders that are processed on the other platforms.
Do I still need to file returns in Illinois?
Yes--once you register for a license, you will be required to file a return based on the frequency the state has assigned you.
- If you've previously registered, the state expects you to remain registered and continue to file returns including zero returns.
How to file as a marketplace seller
You will report your interstate sales as "Marketplace Sales" on line 16 of Schedule A when you file.