If a marketplace seller sells exclusively through a registered Illinois marketplace facilitator, does that seller still need to register for an Illinois sales tax permit and file returns, or can it cancel an existing registration?

Plain-English summary

A sales tax consulting firm ("FIRM") wrote to the Department seeking clarification of the registration and filing requirements for "marketplace sellers" who sell exclusively through "marketplace provider(s)" (marketplace facilitators), in light of Illinois's newly enacted marketplace-facilitator legislation. The firm cited P.A. 100-587 (remote sellers and sales tax registration) and S.B. 0689 (marketplace facilitator provisions, which became P.A. 101-0009) as the statutory backdrop for its questions.

The firm asked two specific questions:

1. If a marketplace seller sells exclusively on registered marketplace platforms, must that seller still register for an Illinois sales tax permit? And if so, must it still file sales tax returns even if it will never have any tax liability?
2. If a marketplace seller already holds an Illinois sales tax registration and sells exclusively on a registered marketplace platform, may it cancel that registration on the grounds that it has no current or future sales tax liability?

The Department did not answer either question. Its entire substantive response was that it was "currently drafting information, including rules, implementing the provisions of P.A. 101-0009," and that this information would be posted on the Department's website. The letter did not state whether marketplace sellers selling exclusively through registered facilitators must register or file returns, and did not state whether an existing registration could be cancelled. Readers should not infer an answer to either question from this letter -- the Department expressly deferred both to forthcoming rules and guidance.

What this means for you

Marketplace sellers selling exclusively through a registered facilitator

This GIL does not tell you whether you must register for an Illinois sales tax permit, whether you must file returns despite the facilitator collecting and remitting tax on your behalf, or whether you may cancel an existing registration. The Department said only that implementing rules for the marketplace-facilitator law (P.A. 101-0009) were still being drafted at the time of this September 2019 letter. Check the Department's current published rules and guidance (or consult a licensed Illinois tax professional) rather than relying on this letter for those answers.

Sales tax consultants and accountants

Because this GIL predates the Department's actual implementing guidance for P.A. 101-0009, treat it as a historical record of an open question rather than as authority on marketplace seller registration or cancellation obligations. Look to the Department's subsequent regulations, published guidance, or a current PLR/GIL for the operative rules.

Common questions

Q: Does this letter say whether a marketplace seller who sells exclusively through a registered marketplace facilitator must still register for an Illinois sales tax permit?
A: No. The Department did not answer this question. It said only that it was drafting rules implementing P.A. 101-0009 and would post them on its website.

Q: Does this letter say whether such a seller must still file returns even with no tax liability?
A: No. That question also went unanswered; the Department did not address filing obligations.

Q: Does this letter say whether a marketplace seller that already holds an Illinois registration can cancel it?
A: No. The Department did not address permit cancellation. It gave the same non-answer -- that rules were still being drafted -- to both of the firm's questions.

Q: What did the Department actually say in its response?
A: In full, the Department's response was that it was "currently drafting information, including rules, implementing the provisions of P.A. 101-0009," and that this information would be provided on the Department's website.

Citations and references

Statutes cited:

• P.A. 101-0009 (Illinois's marketplace facilitator law; the Department stated it was still drafting rules and other implementing information for this law, to be posted on its website)

Statutes referenced by the requester (not addressed in the Department's response):

• P.A. 100-587 (remote sellers and sales tax registration)
• S.B. 0689 (marketplace facilitator provisions, enacted as P.A. 101-0009)

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2019.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2019/st19-0018-gil.pdf

Original ruling text

ST 19-0018-GIL 09/05/2019 USE TAX
This provides information regarding Use Tax Collection operation of Marketplace facilitators
under P.A. 101-0009. (This is a GIL.)

September 5, 2019
Dear Xxxx:
This letter is in response to your letter dated July 29, 2019, in which you requested information.
The Department issues two types of letter rulings. Private Letter Rulings (“PLRs”) are issued by the
Department in response to specific taxpayer inquiries concerning the application of a tax statute or
rule to a particular fact situation. A PLR is binding on the Department, but only as to the taxpayer
who is the subject of the request for ruling and only to the extent the facts recited in the PLR are
correct and complete. Persons seeking PLRs must comply with the procedures for PLRs found in the
Department’s regulations at 2 Ill. Adm. Code 1200.110. The purpose of a General Information Letter
(“GIL”) is to direct taxpayers to Department regulations or other sources of information regarding the
topic about which they have inquired. A GIL is not a statement of Department policy and is not
binding on the Department. See 2 Ill. Adm. Code 1200.120. You may access our website at
www.tax.illinois.gov to review regulations, letter rulings and other types of information relevant to your
inquiry.
The nature of your inquiry and the information you have provided require that we respond with
a GIL. In your letter you have stated and made inquiry as follows:
FIRM is a sales tax consulting firm. We are submitting the following questions to the
State of Illinois, in the spirit of a general information letter (GIL), to request clarification
regarding the registration and filing requirements for “marketplace sellers” who sell
exclusively with “marketplace provider(s)”:
a. In the event that a “marketplace seller” sells exclusively on registered
marketplace platforms, would that individual “marketplace seller” still be
required to register for a sales tax permit with Illinois? If so, would they still
be required to submit sales tax returns with Illinois even if there will never be
any tax liabilities?
b. In the event that a “marketplace seller” already maintains a registration with
Illinois and sells exclusively on a registered marketplace platform, would that
individual “marketplace seller” be allowed to cancel their permit registration
with Illinois on account of them having no current or future sales tax liabilities?
Please note the following statutory authority upon which we are relying:
c. P.A. 100-587 – Details regarding remote sellers and sales tax registration
d. S.B. 0689 – Contains provisions regarding marketplace facilitators.
Thank you for your time and please let me know if you have further questions regarding
this request.

ST 19-0018-GIL
Page 2
DEPARTMENT’S RESPONSE:
The Department is currently drafting information, including rules, implementing the provisions
of P.A. 101-0009. This information will be provided on the Department’s website.
I hope this information is helpful. If you require additional information, please visit our website
at www.tax.illinois.gov or contact the Department’s Taxpayer Information Division at (217) 782-3336.

Very truly yours,

Jerilynn Troxell Gorden
Deputy General Counsel

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