On October 28, 2025, the Illinois Department of Revenue (DOR) issued General Information Letter 25-0056-GIL clarifying that companies that process payments for online sellers are not automatically responsible for collecting Illinois sales tax, even if it plays a role in the transactions.
A global payment processor asked the DOR if it should be treated as a seller or a marketplace facilitator for sales tax purposes. The company helps online merchants accept payments and convert currency, but it does not list or advertise products for sale, does not control pricing , shipping or customer service and it does not operate a website where customers shop. State regulations require a marketplace facilitator to list or advertise products for sale and to collect customer payments and pass them on to sellers. The DOR emphasized that both elements must be present. Because the payment processor only managed the financial transactions and did not operate a marketplace or promote any products, it did not meet the definition of a marketplace facilitator.
The company also questioned older contracts where it briefly held legal title of goods for technical reasons tied to credit card network rules. The company wanted clarification on whether it was responsible for sales tax. The DOR explained that briefly holding title to goods, without controlling the sales or delivery, does not automatically make a company the seller for sales tax purposes. The DOR focused on the substance of the transaction, not contractual technicalities.
The ruling provides reassurance for payment processors, e-commerce businesses using third-party payment services and companies navigating evolving marketplace tax rules that processing payments alone does not trigger sales tax responsibilities in Illinois. Unless a company runs a marketplace or actively promotes sales, it will not be responsible for collecting Illinois sales tax.
(General Information Letter ST 25-0056-GIL, Illinois Department of Revenue, October 28, 2025)