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Do I Have Sales Tax Nexus in Illinois?

If you sell to customers in Illinois, you need to determine whether or not you have nexus in the state. Why? Because if you do, you’re required to collect and remit sales to the Illinois Department of Revenue.

What is Nexus?

Nexus is defined as having a physical presence in a state. If you have nexus somewhere, it means you have to collect sales tax on the state's behalf and remit those taxes to the state.

With today’s preponderance of online business, the definition of "physical presence" continues to broaden, and the rules vary state by state. Having an office or store in a state gives you nexus there, but so also do things like storing your inventory, hiring an employee, and even working with affiliates.

Do I Have Nexus in Illinois?

According to the state regulations, the Illinois DOR thinks you have nexus in the state if you:

  • Have or maintain an office, distribution house, sales house, warehouse, or any other place of business in the state. This applies if the property is owned or maintained by you, by someone under your authority, or a subsidiary. It doesn’t matter whether the location, business, agent, or representative is in the state permanently or temporarily,
  • Solicit orders from Illinois shoppers for tangible personal property with television ads that use toll free numbers, or ads using other telecommunications. This includes contracts with cable television companies located within the state.
  • Have a contract with a publisher or broadcaster in the state and use it to disseminate ads to customers who are primarily located in the state.
  • Use mail solicitations that are substantial and recurring that cause you to benefit from any banking, financing, debt collection, telecommunications, or marketing activities in the state.
  • Are controlled or owned by an entity that owns or controls another retailer that is in the same type of business.
  • Own a franchise that is required to collect sales tax in the state and operate under its trade name.
  • Engage in activities in the state that would constitute maintaining a place of business in the state.

If any of these bullet points describes your business, then you have nexus in Illinois and are required to collect sales tax. The Illinois Department of Revenue has all the information you need to register.

Avalara Author
Suzanne Kearns
Avalara Author Suzanne Kearns