Illinois Nexus Requirements
Illinois's economic nexus threshold is $100,000 or 200 transactions. Learn about all nexus types, registration requirements, and compliance steps.
Economic Nexus Threshold
Economic nexus threshold is $100,000 in sales or 200 transactions
Physical Presence Requirements
Physical presence includes property, employees, or inventory. This can include maintaining an office, warehouse, or inventory location; having employees or contractors working in the state; attending trade shows or conducting business meetings regularly; or storing property or equipment within state borders.
Employee Nexus in Illinois
Must register for employer withholding tax
Affiliate & Click-Through Nexus
Affiliate Nexus
AppliesAffiliate nexus applies to related entities
Click-Through Nexus
AppliesClick-through nexus provisions apply
Marketplace Facilitator
Illinois requires marketplace facilitators (such as Amazon, Etsy, and similar platforms) to collect and remit sales tax on behalf of third-party sellers. If you sell exclusively through qualifying marketplaces, the marketplace handles your Illinois sales tax collection obligations.
How to Register in Illinois
Determine your nexus
Confirm you have economic or physical nexus based on the thresholds above.
Gather required information
You will need your EIN, business formation documents, and expected sales volume in Illinois.
Register online
Complete the registration through Illinois's official portal.
Begin collecting & remitting
Once registered, start collecting applicable taxes and file returns by the assigned schedule.
Frequently Asked Questions
What is the economic nexus threshold in Illinois?
Illinois's economic nexus threshold is $100,000 in annual sales or 200 transactions. Once you exceed this threshold, you are required to register for sales tax collection and remittance in Illinois.
What creates physical presence nexus in Illinois?
Physical presence includes property, employees, or inventory. This can include having employees, offices, warehouses, inventory, or other tangible property in the state.
How do I register for sales tax in Illinois?
You can register for Illinois sales tax through the state's online portal. Visit the Illinois Department of Revenue website to complete your registration. You will need your business information, EIN, and expected sales volume.
Do I need to register if I have employees in Illinois?
Yes. Must register for employer withholding tax. Having employees in Illinois creates physical presence nexus and may trigger sales tax, income tax withholding, and unemployment insurance obligations.
Does Illinois have marketplace facilitator laws?
Yes, Illinois requires marketplace facilitators (such as Amazon, Etsy, and similar platforms) to collect and remit sales tax on behalf of third-party sellers. If you sell exclusively through marketplaces, the marketplace may handle your Illinois sales tax obligations.
Does Illinois have affiliate and click-through nexus?
Yes, Illinois recognizes affiliate and click-through nexus. Affiliate nexus applies to related entities. Click-through nexus provisions apply.
What happens if I don't register for nexus in Illinois?
Failing to register and collect applicable taxes in Illinois can result in back taxes, penalties, and interest on uncollected amounts. Illinois may also conduct audits that cover multiple prior years. It is recommended to register proactively once you determine you have nexus.
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