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Illinois adopts regulations for remote sellers and marketplaces

January 2021

Overview

The Illinois Department of Revenue adopted regulations effective January 1, 2021 to clarify the imposition and sourcing of Retailers’ Occupation Tax imposed on remote sellers and marketplace facilitators. The regulations define several types of retailers, provide applicable tax and sourcing rules for sales transactions, and include a flowchart to assist retailers with registration to collect and remit tax. Part 131 - Leveling the Playing Field for Illinois Retail Act, Illinois Department of Revenue (1/1/21)

The takeaway

Multichannel retailers engaged in selling through their own website, as well as through a marketplace or Illinois brick and mortar retailers that also sell over a marketplace, must segregate sales transactions for the appropriate tax and sourcing location. Retailers should familiarize themselves with the Department’s flowchart to understand how the tax is applied in different situations to stay compliant with indirect tax requirements in Illinois.

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Peter Michalowski

National SALT Practice Leader, PwC US

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