I am an out-of-state retailer who makes sales on my own. I also make sales through a marketplace that remits tax to IDOR. I have inventory located in Illinois. How do I determine what tax I owe?
Your tax liability will depend on how the inventory is used.
- If the inventory is used strictly to fulfill orders made over the marketplace, the inventory does not create physical presence nexus for you. As a result, you are a remote retailer.
- If you meet either of the tax remittance thresholds, you incur state and local retailers' occupation tax on your own sales at the rate in effect at the Illinois location to which the tangible personal property is shipped or delivered or at which possession is taken by the purchaser (destination rate).
- If you do not meet either of the tax remittance thresholds, you have no sales tax liability. However, you may voluntarily collect and remit 6.25% Use Tax.
- If the inventory is used to fulfill your own sales, or if it is used to fulfill both your own sales and the marketplace sales, then the Illinois inventory creates physical presence nexus for you. As a result, you are not a remote retailer. When your sale is fulfilled from inventory located
- in Illinois, you will incur state and local retailers' occupation taxes at the rate in effect at the location of the inventory (origin rate).
- out of state, you incur Use Tax.
Note: This FAQ only applies to inventory. For other forms of physical presence, see 35 ILCS 105/2 (1.1) and (1.2).
Form ST-1, Sales and Use Tax and E911 Surcharge Return, Questions
How do I report my own sales on Form ST-1 when I also make sales through a marketplace?
Your non-marketplace sales are reported on your Form ST-1. Sales made through a marketplace that is collecting and remitting taxes for you are not reported on your Form ST-1. Do not include and then deduct any marketplace sales on Form ST-1.
Should I include and then deduct my marketplace sales on my Form ST-1?
No, you should not include any marketplace sales in Total Receipts and then deduct them on Schedule A. Just leave these sales off Form ST-1.
I am a marketplace facilitator that makes my own sales in addition to marketplace sales. How do I report my own sales and the marketplace sales on Form ST-1?
You will need to register for two sales and use tax accounts - one for your own sales and one for all sales made on behalf of marketplace sellers through your marketplace. Your own sales are reported on one Form ST-1 and all marketplace sales are reported on a different Form ST-1. On the Form ST-1 reporting your own sales, do not include and then deduct any marketplace sales.