Illinois acts on significant sales and use tax changes

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June 2019

UPDATE: S.B. 690 and S.B. 1939 were signed by the governor on June 28, 2019.

Overview

Enacted on June 5, S.B. 689 makes significant changes to Illinois’ sales and use tax laws, including (1) subjecting remote retailers and marketplace facilitators to a collection obligation, (2) providing exemptions for purchases of production-related property, and (3) establishing a tax amnesty program.

Enacted on June 25, S.B. 1438 imposes a cannabis tax. 

Additionally, a series of bills passed by the legislature and expected to be signed by the governor would (1) provide the local taxation situs for remote sellers, (2) provide an exemption for data center purchases, and (3) increase certain excise taxes.  We will update this Insight to provide the ultimate resolution of these bills.

The takeaway

Illinois manufacturing taxpayers should receive a significant benefit following the full exemption for production related tangible personal property.  It should be a welcome relief to receive the benefit without the administrative burdens associated with claiming credits under the old MPC.

Out-of-state retailers should be aware of the new remote retailer obligations, including destination sourcing.

Contact us

Peter Michalowski

Peter Michalowski

State and Local Tax Leader, PwC US

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