- Illinois has implemented destination sourcing rules for sales tax since January 1, 2021
- The change aligns with the 2018 US Supreme Court decision allowing states to tax remote sellers based on the purchase destination
- Before 2021, Illinois used origin-based sourcing for intrastate transactions calculating tax from the seller’s location
- New rules require remote sellers and marketplace facilitators to collect tax based on the delivery address if they meet economic thresholds
- Local taxes must be collected by intrastate retailers delivering across different jurisdictions within Illinois
- Recent updates effective January 1, 2025, will clarify tax obligations based on delivery or service consumption locations
- Retailers and marketplaces must collect taxes based on customer locations, affecting both in-state and remote sellers
- The guidance addresses tax collection for shipped products and items picked up at non-business locations
- Destination sourcing impacts local tax rates, requiring precise determination of applicable taxes for each transaction
- Illinois Department of Revenue suggests using tax automation software for accurate tax calculations and record-keeping
- Affected parties include brick-and-mortar retailers, eCommerce sellers, and marketplace facilitators
Source: thompsontax.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
