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Out-of-State Retailers May Have to Collect Illinois Use Tax, January 2015

  • Dec 29, 2015 | Gail Cole

 Illinois to expand nexus in 2015.

An increasing number of out-of-state retailers doing business in Illinois may have to collect and remit use tax, effective January 1, 2015.

According to the Illinois Department of Revenue, retailers are presumed to be maintaining a place of business in Illinois and are required to collect and remit use tax on sales to Illinois customers if all of the following conditions are met:

  • The out-of-state retailer has a contract with a person in Illinois.
  • The contract between the out-of-state retailer and the Illinois resident stipulates that the resident refers potential customers to the retailer and the retailer pays the resident a commission or other consideration based on the sale of tangible personal property by the retailer to the referred customer.
  • The Illinois resident provides the potential customers a promotional code or other mechanism that allows the retailer to trace the purchases made by these customers.
  • The retailer made cumulative gross sales of $10,000 during the preceding four quarterly periods to customers referred by persons located in Illinois, regardless of the location of the customers.

These changes are based on Public Act 98-1089.

If the above criteria are met, out-of-state retailers must register with the Illinois Department of Revenue and report, collect and remit use tax on sales to Illinois customers. Out-of-state retailers are responsible for determining whether or not they are required to collect and remit Illinois use tax. “Failure to collect and remit Use Tax if required by statute will subject a retailer to liability for the uncollected amounts, plus penalties and interest.” Additional information.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.