Illinois is looking to simplify its economic nexus threshold for sales tax by removing the 200-transaction requirement for remote sellers. If this Illinois sales tax update is passed, only sellers with over $100,000 in sales to Illinois will be required to collect and remit tax—significantly impacting out-of-state seller compliance, and helping smaller sellers breathe easier.
Which Businesses Are Affected by the Illinois Nexus Change?
Remote sellers, e-commerce retailers, and out-of-state businesses subject to Illinois sales tax nexus rules should pay close attention to this change. Currently, even businesses with low total revenue but many small transactions are pulled into sales tax compliance. This proposed economic nexus update under Senate Bill 752 means fewer businesses will be required to register and collect Illinois sales tax.
If your business is based outside Illinois but sells to customers in the state, this could reduce your compliance obligations starting in 2025.
Proposed Change to Illinois Sales Tax Nexus Rules Explained
Under current rules, out-of-state sellers must collect Illinois sales tax if they meet either:
- $100,000 in gross receipts from Illinois customers or
- 200 or more separate sales into the state in the previous 12 months
What’s Changing:
- Senate Bill 752 proposes removing the 200-transaction threshold, meaning only businesses making over $100,000 in annual sales to Illinois customers would be required to collect and remit sales tax.
Why It Matters:
- Less stress for small businesses that make lots of small sales but don’t earn much revenue.
- Aligns Illinois with other states (like California and New York) that already use a sales-only threshold.
- Makes it easier to track and manage economic nexus compliance, especially for businesses using automation tools or platforms for e-commerce sales tax tracking.
Effective Date:
- If the bill passes, the change to the Illinois economic nexus threshold will go into effect upon becoming law.
Next Steps for E-commerce Sellers Under Illinois’ Proposed Tax Law
If you’re selling into Illinois, here’s what you can do:
- Check your Illinois sales volume for the past 12 months.
- Do you exceed $100,000 in sales to customers in the state?
- Ignore your transaction count for now, but keep tracking until the change is official.
- Stay updated on the progress of Illinois Senate Bill 752 through official channels or your tax advisor.
- Adjust your tax compliance software ahead of January 2025 to reflect the simplified rule (if passed).
Navigating Illinois Tax Changes with TaxValet’s Help
If you become a TaxValet client, here’s how we’ll make your life easier:
- Proactive monitoring of Illinois legislation so you don’t have to keep tabs on it yourself.
- Updates to your nexus tracking—we’ll shift to the updated Illinois sales tax threshold once it’s enacted.
- Clear communication—we’ll notify you if your nexus status changes based on the new rule.
- Stress-free compliance—we handle your registrations, filings, and remittances, so even if the rules change, you’re always covered.
Bottom line? Whether you're navigating sales tax for e-commerce or managing out-of-state seller compliance, TaxValet ensures you're always in line with the latest rules. With TaxValet on your team, changes like this become one less thing on your to-do list.
Ready to put your sales tax on auto-pilot with actual human experts on call? Reach out—let’s chat.