Illinois Department of Revenue Summarizes Nexus Inquiry

Thursday, April 14th, 2011

 
 
Share
Link
Illinois
General

With the issuance of a recent General Information Letter (GIL), the Illinois Department of Revenue has summarized the principles it uses in determining whether a retailer has nexus in Illinois. When a retailer has nexus in Illinois, the retailer is subject to Illinois tax laws and, therefore, must collect and remit sales tax. Illinois divides retailers into three categories: (1) Illinois retailers--those who either accept purchase orders in Illinois or maintain an inventory in Illinois from which the retailer fills its Illinois orders; (2) retailers who maintain a place of business in Illinois; and (3) out-of-state retailers. The first two types or retailers, Illinois retailers and retailers who maintain a place of business in Illinois, have nexus in Illinois, but the third type—the out-of-state retailers—lack sufficient nexus with Illinois to be subject to its state tax laws. The key is the distinction between the second and third categories, or in other words, whether the retailer maintains a place of business in Illinois or is instead an out-of state retailer. Under both U.S. constitutional and Illinois law, this determination is a question of nexus, and, so, it turns on whether the retailer has a physical presence in Illinois. Physical presence is not limited to having a physical building in Illinois; instead, any type of physical presence in Illinois, including a retailer's delivery and installation of its product on a repetitive basis, will trigger a finding that the retailer has nexus in Illinois.

In addition, Illinois recently amended its law to expand nexus to reach many Internet-based retailers that lack a traditional physical presence in Illinois. This law, commonly referred to as an "Amazon Law,” becomes effective July 1, 2011.


About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

New Commercial Farmer Certification Process in Louisiana

Monday, January 21st, 2019 -Effective January, 15, 2019, the Louisiana Department of Revenue has a new certification process for commercia...

Service Repairs to Petroleum Storage Tanks Exempt in...

Friday, January 18th, 2019 -Louisiana's Board of Tax Appeals recently ruled that repairs on petroleum storage tanks were not taxable. ...

Nevada Exempts Feminine Hygiene Products in 2019

Wednesday, January 16th, 2019 -Last year, Nevada voters approved via ballot measure changes to the Sales and Use Tax Act of 1955. Voters amen...

Cleaning of Beer-Tap Lines Not Taxable in Ohio

Monday, January 14th, 2019 -The Supreme Court of Ohio recently ruled that cleaning beer-tap lines is not taxable. The taxpayer was...

Louisiana Court of Appeals Finds Marketplace Facilitators...

Friday, January 11th, 2019 -The Louisiana Court of Appeals has recently addressed the sales tax liability of marketplace facilitators. A c...

Iowa Supreme Court Determines Taxable Carpentry Services...

Wednesday, January 9th, 2019 -The Iowa Supreme Court has recently addressed the taxability of various installation services. The taxpayer wa...