Illinois – DOR Says Marketplace Facilitators are Broadly Defined

Illinois – DOR Says Marketplace Facilitators are Broadly Defined and May Include Wide Variety of Ecommerce Businesses

Broad Definition of Marketplace Facilitators: The Illinois Department of Revenue (DOR) has clarified that the definition of a “marketplace facilitator” is broad and encompasses a wide range of e-commerce businesses. This includes any entity that facilitates retail sales by listing or advertising products for third-party sellers, regardless of their direct involvement in payment processing.
Key Responsibilities of Marketplace Facilitators: According to the guidance, marketplace facilitators must facilitate a retail sale by advertising taxable tangible personal property and either directly or indirectly collect and transmit payments to the sellers. The broad language in the relevant statutes includes terms like “facilitates,” “indirectly,” and “provision,” indicating the expansive nature of the definition.
Impact on Internet Auction Listing Services: The letter specifies that from January 1, 2021, internet auction listing services that meet the criteria of a marketplace facilitator, including tax remittance thresholds, will be subject to Illinois state and local retailers’ occupation tax (ROT) on sales made through their platforms. This regulatory clarification emphasizes the importance for e-commerce businesses to understand their tax obligations as marketplace facilitators.