Illinois Administrative Code › Title 86 - REVENUE › Part 131 - LEVELING THE PLAYING FIELD FOR ILLINOIS RETAIL ACT › Section 131.105 - Definitions

Current through Register Vol. 48, No. 28, July 12, 2024
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 ]
"Out-of-State Seller" means:
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 sells the same or substantially similar line
				of products as the person located in this State and does so using an identical
				or substantially similar name, trade name, or trademark as the person located
				in this State; and
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.