a)
"Gross Receipts" and "Separate Transactions" Defined. The following definitions
must be applied by a remote retailer when determining if it meets either of the
thresholds establishing tax remittance obligations:
1) "Gross Receipts" means
all the
consideration actually received for a sale. (See 86 Ill. Adm. Code
130.401 for additional
information regarding gross receipts.)
Subsection (b) of this Section
describes what kinds of transactions must be included or excluded when
determining whether the threshold based on gross receipts is
met.
2) "Illinois
Purchaser" means a person in Illinois who, through a sale at retail,
acquires the ownership of tangible personal property for a valuable
consideration.
3)
"Entering into a Sale" occurs when a remote retailer has taken action that
binds it to a sale. This may occur even though the tangible personal property
that has been sold has not yet shipped to the purchaser.
EXAMPLE: On December 15, 2020, a remote retailer takes actions
binding it to a sale that is scheduled for shipment on January 15, 2021. This
sale must be included in the calculation used to determine the remote
retailer's sales transactions for its initial lookback period under Section
131.115(b)
(i.e., the lookback period of January 1, 2020 through December 31,
2020).
4) "Separate
Transactions" means sales transactions which are documented on separate
invoices, regardless of the manner in which the tangible personal property is
delivered to the purchaser.
EXAMPLE 1: A purchaser orders 12 items of clothing from a
remote retailer. He receives an invoice confirming his order of 12 items.
However, due to a back order, 3 of the clothing items are shipped separately
from the other 9 items. Shipment of the 3 back-ordered items, even with a
separate shipping invoice, is not considered a separate transaction because the
original transaction was invoiced as one sale.
EXAMPLE 2: A purchaser places an order of home repair tools at
8:00 a.m. from a remote retailer. She receives an invoice confirming her order
at 8:15 a.m. At 2:00 p.m., the purchaser realizes she needs 5 other tools to
complete the job, and orders these tools from the same remote retailer. The
remote retailer confirms this order with a separate invoice. In this example,
two different transactions have occurred. This is the case, even if the remote
retailer sends all the ordered tools to the purchaser in one package.
EXAMPLE 3: A parent places an order with a remote retailer for
care packages to be delivered to his or her son's dormitory at 8 scheduled
intervals during the school year. Each delivery is separately invoiced. These
are counted as 8 separate transactions.
b) Transactions that are included or excluded
in determining if either of the thresholds establishing tax remittance
obligations are met. A remote retailer must apply the following provisions in
determining whether a transaction should be included or excluded for purposes
of determining if it meets either of the thresholds establishing tax remittance
obligations:
1) Sales for resale must be
excluded. (See 86 Ill. Adm. Code
130.210.)
EXAMPLE: A remote retailer makes a sale of seedlings to Company
B. Company B provides a resale certificate indicating that 60% of the seedlings
will be sold to customers at retail (a purchase for resale) and that it will
use 40% of the seedlings in its landscaping business (a purchase for use). When
calculating its threshold using gross receipts, it should include only 40% of
the gross receipts from this sale. When calculating its threshold using
transactions, however, the remote retailer must include the entire transaction
with Company B.
2)
Neither the gross receipts from nor the number of separate transactions
for sales of tangible personal property to purchasers in Illinois that a remote
retailer makes through a marketplace facilitator shall be included for the
purposes of determining whether he or she has met either of the thresholds
of Section
131.115(a)
so long as the remote retailer has received certification from the
marketplace facilitator as provided in Section
131.145,
that the
marketplace facilitator is legally responsible for payment of tax on such
sales. [
35 ILCS 120/2 (b-5)]
3) Before February 1, 2022, sales of tangible
personal property that is required to be titled or registered with an agency of
this State, including motor vehicles, watercraft, aircraft, and trailers, that
are made by remote retailers to Illinois purchasers must be excluded. Beginning
February 1, 2022, sales of tangible personal property that is required to be
titled or registered with an agency of this State, including motor vehicles,
watercraft, aircraft and trailers, that are made by remote retailers to
purchasers in Illinois must be included.
4) Occasional sales (see 86 Ill. Adm. Code
130.110) must be excluded.
Occasional sales made by remote retailers are not considered sales at retail.
For example, a retailer that engages in selling computers and software over the
Internet closes a regional office in Michigan. As part of that closure, it
sells its office furniture and printing equipment on its website. Transactions
from these sales are excluded from the calculation because they are not
considered sales at retail.
5) All
sales of tangible personal property, other than those excluded by this
subsection (b), even if they are exempt from tax, must be included for purposes
of calculating the thresholds.
