Sales tax on most online shopping goes into effect Monday

Tucked away in one of Illinois’ 2019 budget bills was a requirement that out-of-state businesses selling Illinoisans goods will have to tack a 6-and-a quarter percent sales tax on to purchases starting Monday. (Pixaby)

By Illinois Radio Network/Cole Lauterbach

SPRINGFIELD – This weekend is the last opportunity for Illinoisans to avoid paying sales taxes while shopping online, even though the practice has technically been illegal for years.

Tucked away in one of Illinois’ 2019 budget bills was a requirement that out of state businesses selling Illinoisans goods will have to tack a 6.25 percent sales tax on to purchases starting Monday. Sellers with a physical presence in Illinois, like Amazon, have been doing this for years, but this year’s Supreme Court case South Dakota v. Wayfair says online purchases are subject to the destination’s state tax even if there’s no building within state lines, said Carol Portman of the Taxpayers Federation of Illinois.

“If they have sales volume above a certain threshold, they’re going to have to start collecting Illinois use tax,” she said.

Previously, even though the business didn’t charge an Illinois resident that percentage, the buyer was supposed to list that on his or her state taxes and pay it, Portman said.

“The law in Illinois and every state that has a sales or use tax specifically says that the tax is on the purchaser,” she said. “If your seller didn’t collect tax from you, you were supposed to turn around and figure it out yourself.”

The state expects to bring in $140 million from the change this year.

The tax won’t apply to sellers who do less than $100,000 in sales in 12 months or fewer than 200 transactions, but Portman said there may be questions about whether the crafter of the goods is the seller or the massive online service like Etsy is considered the entity.

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