CHAPTER I: DEPARTMENT OF REVENUE
PART 131 LEVELING THE PLAYING FIELD FOR ILLINOIS RETAIL ACT
SECTION 131.105 DEFINITIONS
Section 131.105 Definitions
As used in this Part:
"Affiliate" means a person that, with respect to another person:
has a direct or indirect ownership interest of more than 5% in the other person; or
is related to the other person because a third person, or a group of third persons who are affiliated with each other (under this definition), holds a direct or indirect ownership interest of more than 5% in the related person.
"Certified Service Provider" or "CSP" means an agent certified by the Department to perform the remote retailer's use and occupation tax functions, as outlined in the contract between the State and the certified service provider. [35 ILCS 185/5-10]
"Certified Automated System" or "CAS" means an automated software system that is certified by the State as meeting all performance and tax calculation standards required by this Part. References throughout this Part to a CAS mean the person that owns or provides the certified automated software system used by a remote retailer. [35 ILCS 185/5-10]
"Department" means the Department of Revenue. [35 ILCS 185/5-10]
"Marketplace" means a physical or electronic place, forum, platform, application, or other method by which a marketplace seller sells or offers to sell items. [35 ILCS 120/1]
"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:
listing or advertising for sale, by the marketplace seller in a marketplace, tangible personal property that is subject to tax under the Retailers' Occupation Tax Act [35 ILCS 120]; and
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 services.
A person who provides advertising services, including listing products for sale, is not considered a marketplace facilitator, so long as the advertising service platform or forum does not engage, directly or indirectly through one or more affiliated persons, in the activities described in the second indented paragraph of this definition. [35 ILCS 120/1]
Effective August 27, 2021, “marketplace facilitator” does not include any person licensed under the Auction License Act, [225 ILCS 407]. This exemption does not apply to any person who is an Internet Auction listing service, as defined in Section 5-10 of the Auction License Act. [35 ILCS 120/1]
"Marketplace Seller" means a person that makes sales through a marketplace operated by an unrelated third-party marketplace facilitator and who has obtained a certification from the marketplace facilitator as provided in Section 131.145. A person that is an affiliate, as defined in this Section, of a marketplace facilitator is not a marketplace seller. [35 ILCS 120/1]
A seller located outside Illinois but that has or maintains within Illinois, directly or by a subsidiary, an office, distribution house, sales house, warehouse or other place of business, or any agent or other representative operating within this State under the authority of the seller or its subsidiary, irrespective of whether such place of business or agent or other representative is located here permanently or temporarily, or whether such seller or subsidiary is licensed to do business in this State. However, the ownership of property that is located at the premises of a printer with which the seller has contracted for printing and that consists of the final printed product, property that becomes a part of the final printed product, or copy from which the printed product is produced shall not result in the seller being deemed to have or maintain an office, distribution house, sales house, warehouse, or other place of business within this State; or
A seller located outside Illinois but that has a contract with a person located in this State under which the person, for a commission or other consideration based upon the sale of tangible personal property by the seller, directly or indirectly refers potential customers to the seller by providing to the potential customers a promotional code or other mechanism that allows the seller to track purchases referred by such persons. Examples of mechanisms that allow the seller to track purchases referred by such persons include but are not limited to the use of a link on the person's Internet website, promotional codes distributed through the person's hand-delivered or mailed material, and promotional codes distributed by the person through radio or other broadcast media. These provisions shall apply only if the cumulative gross receipts from sales of tangible personal property by the seller to customers who are referred to the seller by all persons in this State under such contracts exceed $10,000 during the preceding 4 quarterly periods ending on the last day of March, June, September, and December. A seller meeting the requirements of this paragraph shall be presumed to be an Out-of-State Seller but may rebut this presumption by submitting proof that the referrals or other activities pursued within this State by such persons were not sufficient to meet the nexus standards of the United States Constitution during the preceding 4 quarterly periods; or
A seller located outside Illinois but that has a contract with a person located in this State under which
the seller provides a commission or other consideration to the person located in this State based upon the sale of tangible personal property by the seller.
The provisions contained in the preceding two indented paragraphs shall apply only if the cumulative gross receipts from sales of tangible personal property by the seller to customers in this State under all such contracts exceed $10,000 during the preceding 4 quarterly periods ending on the last day of March, June, September, and December. [35 ILCS 105/2]
An out-of-state seller incurs a Use Tax (6.25%) collection obligation for sales made to Illinois purchasers when both its selling activities occur outside Illinois and the inventory used to fill purchases for Illinois purchasers is located outside Illinois (see 86 Ill. Adm. Code 270.115(c) and (d) for factors used to make this determination). If either its selling activities occur in Illinois or its inventory is located in Illinois for a sale made to an Illinois purchaser, the out-of-state seller is considered an Illinois retailer for that transaction (like an Illinois brick and mortar retailer) and is subject to State and local retailers' occupation taxes at the origin rate at the location at which the selling activities occur or the location at which the inventory is located (see 86 Ill. Adm. Code 270.115(c) and (d) for factors used to make this determination).
"Person" means any natural individual, firm, partnership, association, joint stock company, joint adventure, public or private corporation, limited liability company, or a receiver, executor, trustee, guardian or other representative appointed by order of any court. [35 ILCS 120/1]
"Remote Retailer" means a retailer that does not maintain within this State, directly or by a subsidiary, an office, distribution house, sales house, warehouse or other place of business, or any agent or other representative operating within this State under the authority of the retailer or its subsidiary, irrespective of whether that place of business or agent is located in Illinois permanently or temporarily or whether the retailer or subsidiary is licensed to do business in this State. A retailer that fulfills any orders from its own inventory in Illinois is not a "remote retailer". [35 ILCS 120/1]. For purposes of this Part, beginning on January 1, 2021, a remote retailer’s inventory at the location of a marketplace facilitator in Illinois does not create a physical presence nexus when used exclusively to fulfill orders made over the marketplace that meets a tax remittance threshold under Section 131.135(a) because the marketplace facilitator is considered the retailer with respect to sales over the marketplace.
"Retailers' Occupation Tax" means the tax levied under the Retailers' Occupation Tax Act (ROTA) and all applicable local retailers' occupation taxes collected by the Department in conjunction with the State retailers' occupation tax.
"Unrelated Third Party" means a person that, with respect to another person, has a direct or indirect ownership of 5% or less in the other person. A person is also considered to be an unrelated third party when a third person, or group of third persons who are affiliated with each other as defined in this Section, hold a direct or indirect ownership interest of 5% or less in the other person.
(Source: Amended at 46 Ill. Reg. 2697, effective January 26, 2022)