Marketplace Sellers Can Claim Sales Tax Credits Under Illinois Law

Under a new Illinois bill, certain marketplace sellers may file a claim for a credit for retailers’ occupation taxes remitted to the Department of Revenue on sales for which use tax was also collected and remitted by a marketplace facilitator. Illinois imposes retailers’ occupation tax (Illinois’ sales tax) on businesses with physical presence in the state and imposes use tax on remote sales. The bill amends a previous double taxation issue on sales for which marketplace sellers with physical presence in Illinois (through inventory in the state, for example) collected the state retailers’ occupation tax even if a marketplace facilitator also remitted use tax.

Credits may be claimed for taxes on sales from January 1, 2020 to December 31, 2020 provided the marketplace seller has books and records that demonstrate use tax was remitted by the marketplace facilitator. A marketplace seller cannot claim a credit for taxes for which a credit or refund has been issued to the marketplace facilitator or for which the marketplace facilitator has filed a claim for credit or refund. (S.B. 2066, Laws 2021, effective August 27, 2021)

Posted on September 14, 2021