Sales and Use Tax Definitions

An automated software system that is certified by the Illinois Department of Revenue (IDOR) as meeting all performance and tax calculation standards for retailers’ occupation and use tax returns.

An agent certified by IDOR to perform the remote retailer's use and occupation tax functions, as outlined in the contract between IDOR and the CSP. 

Most tangible personal property including sales, leases, or rentals of

• soft drinks and candy; 
• prepared food such as food purchased at a restaurant; 
• photo processing (getting pictures developed); 
• prewritten and "canned" computer software; prepaid telephone calling cards and other prepaid telephone calling arrangements; 
• repair parts and other items transferred or sold in conjunction with providing a service; 
• grooming and hygiene products;
• copiers that are leased to businesses;
• lawn equipment rented for a period of hours, or days, or weeks from a hardware store; and
• kitchen equipment leased to a restaurant.

All the consideration actually received by the seller, except traded-in tangible personal property. For more information, see 86 Ill. Adm. Code 130.401 and “Selling Price Issues” in IDOR’s 2024 Report of Recurrent Taxpayer Non-Compliance Issues.

A person in Illinois who, through a sale at retail, acquires the ownership of tangible personal property for a valuable consideration.

A person, who has a physical location (generally brick and mortar) in Illinois, that sells tangible personal property at retail to Illinois purchasers. 

Includes motor vehicles, ATVs, watercraft, aircraft, snowmobiles, trailers, and mobile homes.

A physical or electronic place, forum, platform, application, or other method by which a marketplace seller sells or offers to sell items.

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

1. 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; and 
2. either directly or indirectly, through agreements or arrangements with third parties, collecting payment for the tangible personal property 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. 

When a marketplace facilitator meets a tax remittance threshold, the marketplace facilitator is required to register with IDOR, file returns, and remit State^* and local retailers' occupation tax for all sales made through the marketplace to Illinois purchasers, including their own sales and sales made on behalf of marketplace sellers. A marketplace facilitator shall certify to each marketplace seller that the marketplace facilitator will assume the rights and duties of a retailer under the ROT Act and all applicable local retailers’ occupation taxes administered by IDOR with respect to sales made by the marketplace seller through the marketplace. (86 Ill. Adm. Code 131.145)

A person who makes a sale or sales through a marketplace operated by an unrelated third-party marketplace facilitator and who has obtained a certification from the marketplace facilitator that the marketplace facilitator will collect and remit all Illinois taxes. A person who is an affiliate of a marketplace facilitator is not a marketplace seller.

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.

Having or maintaining 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 Illinois under the authority of the retailer or its subsidiary, irrespective of whether such place of business or agent or other representative is located here permanently or temporarily, or whether such retailer or subsidiary is licensed to do business in Illinois. See 35 ILCS 105/2 for more information. 

Anyone who, through a sale at retail, acquires the ownership of or title to tangible personal property for a valuable consideration.

• food that has not been prepared for immediate consumption, such as most food sold at grocery stores, excluding hot foods, alcoholic beverages, candy, and soft drinks; 
• prescription medicines and nonprescription items claimed to have medicinal value, such as aspirin, cough medicine, and medicated hand lotion, excluding grooming and hygiene products; and 
• prescription and nonprescription medical appliances that directly replace a malfunctioning part of the human body, such as corrective eyewear, contact lenses, prostheses, insulin syringes, and dentures, as well as leases of such medical appliances to a patient.

A retailer who 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 inventory in Illinois is not a "remote retailer".

A remote retailer’s inventory at the location of a marketplace facilitator in Illinois does not create a physical presence when used exclusively to fulfill orders made over a 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 such marketplace.

Any person engaged in the business of selling, leasing, or renting tangible personal property to another person other than for use or consumption. 

Any transfer of the ownership, for a valuable consideration, of tangible personal property to a purchaser (end-user) who will use or consume the tangible personal property. 

A tax imposed on retailers selling tangible personal property to purchasers in Illinois. It includes the taxes levied under the Retailers' Occupation Tax Act (35 ILCS 120) and all applicable local retailers' occupation taxes administered by IDOR. Remote retailers and marketplace facilitators, see the Leveling the Playing Field for Illinois Retail Act Flowchart to determine which tax you are to collect. There is no authority for remote retailers to voluntarily collect sales tax. 

Destination rate sales tax - The total State and local retailers' occupation tax rate in effect at the location to which the tangible personal property 

• is shipped or delivered or 
• at which possession is taken by the purchaser.

Origin rate sales tax - The total State and local retailers' occupation tax rate in effect at the location of the Illinois inventory from 

• which a sale is fulfilled or 
• where selling activities occur (e.g., brick and mortar store in Illinois or your home office in Illinois). 

A marketplace facilitator selling tangible personal property at retail in Illinois must remit State and local retailers’ occupation tax for all sales made through the marketplace to Illinois purchasers, including their own sales and sales made on behalf of marketplace sellers if either of the following thresholds is met:

• $100,000 or more in cumulative gross receipts from sales of tangible personal property to purchasers in Illinois made through the marketplace by the marketplace facilitator and by marketplace sellers; or 

• 200 or more separate transactions for the sale of tangible personal property to purchasers in Illinois by the marketplace facilitator and marketplace sellers selling through the marketplace.

A remote retailer selling tangible personal property at retail in Illinois is subject to State and local sales tax if either of the following thresholds is met:

• $100,000 or more in cumulative gross receipts from sales of tangible personal property to purchasers in Illinois; or 

• 200 or more separate transactions for the sale of tangible personal property to purchasers in Illinois.

The exercise by any person of any right or power over tangible personal property incident to the ownership of that property.

A tax imposed upon the privilege of using in Illinois tangible personal property purchased at retail from a retailer. Use Tax is not a destination-based tax. It is flat rate throughout the State of 6.25% for general merchandise and 1% for qualifying food, drugs and medical appliances.

Although not required, a remote retailer who does not meet either threshold may collect Illinois Use Tax as a courtesy to its customers. Illinois purchasers incur an Illinois Use Tax liability on out-of-State^** purchases that do not have Illinois sales or use tax collected and remitted by the seller.

* As used in this document, “State” refers to the State of Illinois.

** As used in this document, “out-of-State” refers to outside of the State of Illinois.