Illinois Releases Answers to 2022 Sales and Use Tax Issues Survey

In response to a request from a state tax reference book, Illinois has published a General Information Letter addressing issues surrounding the state’s nexus standards and other laws and procedures.  In answering the questions provided, the state clarified their treatment of marketplace sellers, digital goods, and other hot topics in sales and use tax. Some highlights of their answers include:

  • Marketplace Sellers who only make sales on a marketplace may still have a filing obligation for tax types other than Retailer’s Occupation Tax if they meet the economic nexus threshold.
  • A Marketplace Facilitator that does not have physical or economic nexus does not qualify as a marketplace facilitator in Illinois if they register voluntarily, and marketplace sellers may still have a requirement to collect and remit tax for sales on such marketplaces.
  • Marketplace facilitators should make arrangement to remit taxes other than Retailer’s Occupation Tax to marketplace sellers if they are collected on orders, so marketplace sellers may remit the tax.
  • Requests for credits or refunds filed within six months prior to the expiration of the statute of limitations for the refund are automatically extended for six months

The General Information Letter also clarifies that the state does not tax intangible electronic goods and lists the services the state taxes. The letter also details the procedures under which a whistleblower alerting the department to violations of the state tax law may receive a portion of the money recovered. (Illinois Department of Revenue, General Information Letter ST 22-0020-GIL)

Posted on November 10, 2022