Illinois Sales Tax Nexus Rules Adjusted to Address PetMeds Challenge

• Illinois is adjusting their sales tax nexus rules to apply compliance requirements equally to in-state and remote sellers
• Senate Bill 3362 will amend the Retailers’ Occupation Tax to include retailers with a place of business in Illinois making sales to Illinois customers from outside the state
• This change will take effect on January 1, 2025
• Illinois is following states like Colorado, Arizona, and New Mexico in compelling most sellers to collect state and local sales tax
• The new law clarifies sales tax compliance obligations for in-state sellers, fully remote sellers, and remote sellers with an in-state presence
• Sellers with physical presence in Illinois will collect and remit state and local Retailers’ Occupation Tax based on their location
• Sellers with economic presence in Illinois will collect state and local Retailers’ Occupation Tax based on the destination location of their customer
• Illinois is making these changes in response to a court case filed by PetMeds Express alleging discrimination against interstate commerce and undue burden on remote sellers.

Source: sovos.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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