Pub-113-SOT, Registering your Business

1. Who must register as a salesperson?
2. Can a De Minimis Serviceperson maintaining a place of business voluntarily register to remit SOT?
3. If I am just starting my business, what do I do to register?
4. How do I activate a MyTax Illinois logon?
5. How will I know that I have successfully registered?
6. What if I make transfers of TPP incident to sales of service at more than one location?
7. How do I add, change, or discontinue one of my tax sites?
8. Will I need to renew my certificate?
9. What if my certificate is lost, damaged, or destroyed?
10. What if I discontinue my business, close one of my locations, or change my business structure? 
11. What if I need to update my business registration information?
12. Who do I contact if I have questions about registration?

A Serviceperson must first determine whether they must register for SOT with IDOR.

1. Are you a Serviceperson Maintaining a Place of Business in this State?

Only Servicepersons Maintaining a Place of Business in this State and making sales of service to Illinois purchasers are required to register for SOT with IDOR. If you meet any of the following activities, you are considered a Serviceperson Maintaining a Place of Business in this State:

a)  you have or 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 your authority or a subsidiary of yours, irrespective of whether such place of business or agent or other representative is located here permanently or temporarily, or whether you or your subsidiary is licensed to do business in this State;

b)  you have a contract with a person located in this State under which the person, for a commission or other consideration, based a sale of service by you, directly or indirectly refers potential customers to you by providing to the potential customers a promotional code or other mechanism that allows you to track purchases referred by such persons. Examples of mechanisms that allow you 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. The provisions of this paragraph apply only if the cumulative gross receipts from sales of service by you to customers who are referred to you by all persons in this State under such contracts exceed $10,000 in the last 12 months; or

c)  you have a contract with a person located in this State under which:

1. you sell the same or substantially similar line of services as the person located in this State and do so using an identical or substantially similar name, trade name, or trademark as the person located in this State; and
2. you provide a commission or other consideration to the person located in this State based upon the sales of service by you;

Note: The provisions of paragraph (c) apply only if the cumulative gross receipts from transfers of TPP incident to sales of service by you to customers in this State under all such contracts exceed $10,000 in the last 12 months.

d)  you make sales of service to purchasers in Illinois only from outside of Illinois and you have cumulative gross receipts from sales of service to purchasers in Illinois of $100,000 or more over the preceding 12-month period; or

e)  you are a Marketplace Facilitator making sales of service over the Marketplace to purchasers in Illinois and you have cumulative gross receipts from sales of service by yourself and by your Marketplace Servicepersons to purchasers in Illinois of $100,000 or more over the preceding 12-month period.

The Serviceperson or Marketplace Facilitator shall determine on a quarterly basis, ending on the last day of March, June, September, and December, whether it meets the $100,000 gross receipts from sales of service to Illinois purchasers threshold for the preceding 12-month period. If the Serviceperson or Marketplace Facilitator meets the threshold for a 12-month period, it is considered a Serviceperson Maintaining a Place of Business in this State and is required to collect and remit tax and file returns for one year.

A Remote Serviceperson that has not met the $100,000 Tax Remittance Threshold is not a Serviceperson Maintaining a Place of Business in this State and does not need to register with the Department to remit SOT. These Remote Servicepersons may register with IDOR as voluntary SUT collectors as a courtesy to their Illinois customers who still have an obligation to remit SUT on their purchases.

2.  Are you a De Minimis Serviceperson?

Servicepersons Maintaining a Place of Business in this State must review their fiscal year Cost Ratio to determine if they are a “De Minimis” Serviceperson. If the cost of TPP transferred in the prior fiscal year is less than 35% of the total gross receipts from all Illinois sales of service (75% in the case of Servicepersons transferring prescription drugs or engaged in graphic arts production), the Serviceperson is de minimis. If the total cost of TPP exceeds 35% of the total gross receipts (or 75%, if applicable), the Serviceperson is not de minimis. Servicepersons maintaining a place of business in this State who are not de minimis must register for and remit SOT to IDOR on all sales of service as an incident of which TPP is transferred to Illinois purchasers.

3.  Do you make retail sales subject to the ROTA?

If a De Minimis Serviceperson maintaining a place of business in this State also makes sales at retail to Illinois purchasers, the Serviceperson must register as a retailer under Section 2a of the ROTA and pay ROT on those sales at retail. Such a Serviceperson must also register for and remit SOT to IDOR on the TPP transferred incident to sales of service to Illinois purchasers. However, Remote Servicepersons must determine if they have met a separate tax remittance threshold for their sales at retail to Illinois customers before registering under Section 2a of the ROTA.

De Minimis Servicepersons that are not registered as a retailer under Section 2a of the ROTA and Remote Servicepersons that do not make any retail sales to Illinois customers are only required to pay UT on the cost of TPP transferred to customers during sales of service. See 86 Ill. Adm. Code 140.108 for more detail.

De Minimis Servicepersons who incur UT on their cost price should pay UT to their suppliers but must register to remit UT if their suppliers are not registered to collect it from them. See 86 Ill. Adm. Code 140.108(a)(1) for more detail. A De Minimis Serviceperson maintaining a place of business in this State may choose to register for SOT with IDOR, in which case the Serviceperson should give its suppliers a resale certificate and remit UT to IDOR.

Note: The Illinois UT rate is 6.25 (.0625) percent for general merchandise. If you paid the correct tax to another state but the tax you paid is lower than the Illinois rate, you must pay IDOR the difference.

A De Minimis Serviceperson not maintaining a place of business in this State and not making any retail sales into this State would only owe UT to its supplier out of State and not to Illinois. However, this Serviceperson’s Illinois customer would owe SUT on the TPP transferred as an incident to the sale of service. As a courtesy to its Illinois customers, the Serviceperson may voluntarily register for, collect, and remit SUT.

Examples of sales of service subject to SOT.

You are engaged in the business of making sales of service in Illinois and must remit SOT and any applicable local service occupation taxes* administered by IDOR on TPP transferred incident to sales of service if:

a)  you transfer TPP incident to a sale of service in Illinois from a location in this State to purchasers located in this State;

b)  you are an out-of-State Serviceperson that maintains inventory in this State and fulfills from that inventory a transfer of TPP to a sale of service in Illinois to a purchaser located in this State;

c)  you transfer TPP incident to a sale of service in Illinois at craft shows, fairs, seminars, or conventions in this State;

d)  you are a Marketplace Facilitator who meets the Tax Remittance Threshold of $100,000 or more in cumulative gross receipts from sales of service to Illinois purchasers, for the preceding four calendar quarters making sales of service on behalf of marketplace sellers through the Marketplace and as an incident of these sales of service, TPP is transferred; or

e) you are a Serviceperson Maintaining a Place of Business in this State, and you transfer TPP incident to a sale of service to Illinois customers from locations outside of Illinois and the property is shipped or delivered into Illinois.

*Applicable to Servicepersons who are not de minimis and Servicepersons, including De Minimis Servicepersons, who are registered under Section 2a of the ROTA. De Minimis Servicepersons who are not registered under ROTA may opt to pay UT to their suppliers.

Back to top

Yes. Instead of remitting UT to their suppliers, De Minimis Servicepersons who are not registered under Section 2a of the ROTA may elect to register for SOT. This SOT would be applied to either the separately stated Selling Price of TPP transferred as incident to sales of service or 50% of the entire billing. However, a De Minimis Serviceperson may not choose to pay service occupation tax on some transactions and UT on others during their fiscal year. See 86 Ill. Adm. Code 140.108(a)(4) for more detail. See below for discussion on SOT tax base.

Back to top

Register with IDOR electronically using MyTax Illinois:

If you are not already registered, select “Register a New Business (Form REG-1)” and complete the registration application.

If you choose to register using the paper application, complete and sign Form REG-1, Illinois Business Registration Application, allow 6-8 weeks for processing, and submit it via email, fax, or mail to:

CENTRAL REGISTRATION DIVISION 3-222
ILLINOIS DEPARTMENT OF REVENUE
PO BOX 19030
SPRINGFIELD IL 62794-9030

Fax: 217-785-6013

Email: rev.crd@illinois.gov

Back to top

Once your business is registered, you can activate your MyTax Illinois logon. Please allow 24 hours from your registration confirmation email before activating a logon for MyTax Illinois. To activate a logon for business, go to mytax.illinois.gov, select the “Sign Up” link, and then select the taxpayer ID type. You can use one of the following options to validate the activation:

• Owner/Officer or Responsible Party Social Security Number
• PIN previously issued by IDOR (used for certain electronic filing methods, such as Webfile and third-party tax software, separate from MyTax Illinois)
• Account Activity validation

This activation process is to help ensure only individuals who are authorized by their organization are allowed to gain access to a business’s tax information.

Once you have activated your MyTax Illinois logon, if you are a Corporation, S-Corp, Partnership, or LLC organization type and are registered for other tax accounts, you can register for new tax types through your existing MyTax Illinois logon account, by selecting “More…” and then selecting “Register for New Tax Accounts.”

Sole proprietorships can only register for new tax accounts by selecting “Register a New Business (Form REG-1)” and completing Form REG-1, the Illinois Business Registration Application, on the MyTax Illinois home screen.

Back to top

IDOR will electronically issue you a Certificate of Registration (Certificate). You are required to have this Certificate if you engage in the business of transferring TPP incident to a sale of service. The Certificate lists your Sales and Use Tax Account ID, your business name, address, the effective date, the tax type for which you are registered, and the date the Certificate will expire.

MyTax Illinois is the primary method you should use to obtain and print or download a copy of your Certificate. From your MyTax Illinois logon, the Certificate is located by selecting “View more account options” in the ST-1 Sales/Use Tax panel and then “View Account Letters” in the “Letters and Messages” panel. The Certificate is on the second page of the Business Authorization letter. If you are unable to print or download a copy of your business’s Certificate, you can also contact our Central Registration Division (CRD) by email at rev.crd@illinois.gov or phone at 217 785-3707 to request a paper copy be mailed to you.

Back to top

If you are liable for SOT, you must register all locations and local tax jurisdictions (e.g., city or county) at which you make sales of service. IDOR will supply a certificate for each permanent location you register. Certificates for each permanent location will display the individual location address. Certificates for changing locations will display the local tax jurisdiction.

Back to top

If you change the location of your business or, if you are a multiple location filer and one of your locations changes, you can update your registered locations using MyTax Illinois with the “Maintain Locations” request. It is important for you to keep this information up to date to ensure you are filing using the correct tax rate. This is also important to IDOR to ensure that the tax you collected is allocated to the proper jurisdiction.

Back to top

If you are registered as a Serviceperson and are required to file sales tax returns, your Certificate will expire after one year. Your Certificate will be renewed automatically as long as you are complying with all filing and payment requirements.

A hold will be placed on your Certificate if you are in Collections or the account is incomplete (missing information). IDOR will notify you that a hold has been placed and will provide the filing and/or payment requirements to correct your account. If you do not comply, your Certificate will not be renewed. IDOR will notify you if your Certificate will not be renewed automatically.

Back to top

If your Certificate is lost, damaged, or destroyed, you can print a replacement using MyTax Illinois. You can also contact CRD to request a new Certificate.

Back to top

If you discontinue your business or close one of your locations you must update your registration information with IDOR. In addition, you must destroy all Certificates related to that business or location(s).

If you change the structure of your business (e.g., changing from a sole proprietorship to a corporation), you must

• tell us to discontinue the old business entity;
• destroy all Certificates related to that business; and
• register the new business entity by completing a new Form REG-1, Illinois Business Registration Application.

Note: Certificates cannot be transferred.

In addition, you must update your registration information with IDOR. MyTax Illinois allows you to close your existing business and register a new one or to maintain your registered locations. You also can contact CRD or send a completed paper registration form depending on the change or update needed. It is important that you update your registration information with us when you go out of business or discontinue a location.

If in connection with a change in structure of your business, you sell or purchase all or a substantial portion of an existing business, you may have a special reporting requirement. You must complete and file Form CBS-1, Notice of Sale, Purchase, or Transfer of Business Assets, if you purchase from a person subject to Illinois tax outside the usual course of its business;

• the major part of the stock of goods that the seller is in the business of selling or transferring incident to sales of service,
• the furniture or fixtures of the seller's business,
• the machinery and equipment of your business, or
• the real property of your business,

Form CBS-1 must be filed with IDOR at least ten (10) days prior to the sale or transfer date or it will not be processed. If you fail to properly complete and file this form, you may be liable for any unpaid tax of the seller, up to the value of the assets you purchase. If you are the seller, you may file this form on behalf of the purchaser, and some purchasers request that a seller assist them in completing this form or filing it for them. See 86 Ill. Adm Code 130.1701 for more information.

Back to top

Most general maintenance can be completed electronically using MyTax Illinois. MyTax Illinois allows you to change legal and mailing address information, update responsible party, update owners/officers and members/managers (for Limited Liability Companies), update contact information, register for new tax accounts, and request to close or reopen closed tax accounts. MyTax Illinois also allows you to add and cease locations by using the “Maintain Locations” link in your Sales and Use Tax (ST-1) account in MyTax Illinois. Marketplace Facilitators and Remote Servicepersons liable for State and local SOT are no longer required to add or remove sales locations before filing; instead, all sales locations are available on one screen when the user files Forms ST-1 and ST-2 using MyTax Illinois.

Back to top

For registration questions, see our Taxpayer Answer Center at tax.illinois.gov. If you cannot find an answer, you can email IDOR from the Taxpayer Answer Center. You can also contact our Central Registration Division at rev.crd@illinois.gov or 217-785-3707.

Back to top