On June 21, 2018, the United States Supreme Court ruled that a state may impose sales tax collection responsibilities on businesses that have no physical presence in the state (remote sellers). See South Dakota v. Wayfair, 138 S.Ct. 2080 (2018).
Due to this ruling, existing provisions in tax laws in many states immediately became effective and out-of-state businesses became obligated to collect sales taxes (primarily from online sales) and remit them to the states to which the products are shipped.
Following the Supreme Court's decision in South Dakota v. Wayfair, Illinois updated its tax regulations to require out-of-state sellers, including online retailers, to collect and remit Illinois sales tax. This applies to remote sellers who reach a certain threshold of economic activity in Illinois, such as $100,000 in sales or 200 separate transactions in the state within a 12-month period. These thresholds are designed to ensure that smaller businesses are not unduly burdened. Remote sellers that exceed these thresholds are considered to have economic nexus in Illinois and must register with the Illinois Department of Revenue, collect state and local sales taxes from Illinois customers, and remit those taxes to the state. This change aims to level the playing field between online and brick-and-mortar businesses and to ensure that sales tax revenue is collected fairly from all retailers conducting business with Illinois residents.