New Guidance for Marketplace Facilitators Making Sales to Illinois

The Illinois Department of Revenue issued a new bulletin effective January 1, 2021 providing additional guidance for marketplace facilitators. The bulletin supplements Informational Bulletin FY 2021-02.

It advises that as part of the tax remittance threshold determination, marketplace facilitators must exclude the following types of sales, 1) sales for resale (see 86 Ill. Adm. Code 130.210) and 2) sales of tangible personal property that is required to be registered with an agency of Illinois (motor vehicles, watercraft, aircraft, and trailers).

All sales other than the above, including sales exempt from tax, must be included in calculating the tax remittance thresholds.

As marketplace facilitator sales are considered habitual and not occasional, there would be no occasional sales to exclude from their tax remittance threshold calculation.

As defined in 35 ILCS 105/2d, "Marketplace facilitator" means a person who, pursuant to an agreement with an unrelated third-party marketplace seller, directly or indirectly through one or more affiliates facilitates a retail sale by an unrelated third-party marketplace seller by:

(1) listing or advertising for sale by the marketplace seller in a marketplace, tangible personal property that is subject to tax under this Act; and

(2) either directly or indirectly, through agreements or arrangements with third parties, collecting payment from the customer and transmitting that payment to the marketplace seller regardless of whether the marketplace facilitator receives compensation or other consideration in exchange for its service.

Tips for the Taxpayer

It is important that taxpayers review the changes noted in the above bulletin to verify if the changes impact their business. Taxpayers should verify they understand the definitions of sellers outlined in the Administrative code to ensure they are including or excluding the appropriate sales in their threshold determination. Reviewing new tax bulletins as they are released by states in which businesses do business is a good best practice. Consult a tax professional for clarity and expertise.

How Can We Help?

Allyn’s tax team is staffed with seasoned tax professionals experienced in all aspects of Federal, multi-state and local tax compliance and consulting for large US and global corporations. We use that experience to your advantage.

Allyn has significant experience assisting businesses with reviews of their sales and purchases, nexus, and registrations. As tax laws change, we can use our experience to help your business improve compliance, minimize costs, reduce liabilities, and increase profits.

We can help your business maintain compliance with federal and state tax responsibilities and put procedures in place to ensure future streamlining of processes and increased data accuracy for tax purposes.

Contact us and we can provide a customized cost-effective solution to meet your company’s needs. For further information on Allyn Tax services, please contact: tax@allynintl.com.

For More Information

If you are interested in learning more about this topic or other tax topics, please visit our Tax Publications under News & Publications at www.allynintl.com.

Contributor: Sabrina Miller

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About Allyn International

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