Ill. Admin. Code tit. 86 § 150.804
"Affiliate" or "Affiliated with" means a person that, with respect to another person:
has a direct or indirect ownership interest of more than 5% in the other person; or
is related to the other person because a third person, or a group of third persons who are affiliated with each other, holds a direct or indirect ownership interest of more than 5% in the related person.
"Marketplace" means a physical or electronic place, forum, platform, application, or other method by which a marketplace seller sells or offers to sell tangible personal property. Examples of marketplaces include, but are not limited to:
auctions, internet marketplace platforms on which tangible personal property is offered for sale;
antique malls;
home shopping networks selling tangible personal property over television, cable, or satellite networks; or
consignment shops selling tangible personal property on behalf of numerous persons.
"Marketplace facilitator" means a person who, pursuant to an agreement with an unrelated third-party marketplace seller, directly or indirectly through one or more affiliates facilitates a sale by an unrelated third-party marketplace seller by performing both of the activities outlined in subsection (c)(1).
"Marketplace seller" means a person that sells or offers to sell tangible personal property through a marketplace operated by an unrelated third-party marketplace facilitator. (Section 2d of the Act)
"Retail sales". For purposes of this Section, all sales made through a marketplace by a marketplace facilitator on behalf of unrelated third-party marketplace sellers are considered sales made by a retailer at retail.
"Unrelated third party", for purposes of this Section, means a person that, with respect to another person, has a direct or indirect ownership interest of 5% or less in the other person. A person is also considered to be an unrelated third party when a third person, or group of third persons who are affiliated with each other, hold a direct or indirect ownership interest of 5% or less in the other person.
EXAMPLE 1: Ponchos for Pooches makes sales of rain gear for dogs through an internet marketplace that meets the requirements of subsection (d). The rain gear is handmade in Portland, Oregon and then shipped directly to Illinois purchasers. Beginning on January 1, 2020, the marketplace facilitator, rather than Ponchos for Pooches, is considered the retailer of the rain gear and must collect and remit Use Tax to the Department.
EXAMPLE 2: Sales made to Illinois purchasers by Ponchos for Pooches have skyrocketed. As a result, the company now has several employees located in Illinois, and the rain gear those employees produce is inventoried in a warehouse located in Kankakee. Sales to Illinois purchasers are frequently shipped from the Kankakee warehouse. Any sales fulfilled from inventory in the Kankakee warehouse are subject to Retailers' Occupation Tax, including local occupation taxes, because the property sold is located in the inventory of Ponchos for Pooches in Kankakee at the time of sale. (See, for example, 86 Ill. Adm. Code 270.115.) Through December 31, 2020, the marketplace facilitator is no longer considered the retailer for these sales. Ponchos for Pooches is liable for Retailers' Occupation Tax on these sales and must register with the Department to remit Retailers' Occupation Tax on those sales. In this example, the marketplace facilitator has decided to collect all taxes due from purchasers on these sales (including any local occupation tax reimbursements) and transmits them to Ponchos for Pooches. Ponchos for Pooches then remits Retailers' Occupation Tax on these sales to the Department. In this situation, the marketplace facilitator is held harmless for tax on amounts collected and remitted to Ponchos for Pooches.
EXAMPLE 1: Carabibi, a social media network, provides a forum in which persons using the network can buy and sell used tangible personal property. Carabibi functions solely as an advertising platform bringing buyers and sellers together. Once the buyer and seller have contacted each other over the network, they must negotiate the sale and make payment arrangements themselves. While the forum provided by Carabibi constitutes a marketplace as defined in subsection (a), Carabibi is not considered a marketplace facilitator because it does not engage in the activities described in subsection (c)(1)(B).
EXAMPLE 2: Paymate is a payment processing business appointed by merchants to handle payment transactions from various channels, such as credit cards and debit cards. Its sole activity with respect to marketplace sales is to handle financial transactions between two parties on the marketplace. Paymate is not a marketplace facilitator because it does not engage in the activities described in subsection (c)(1)(A).
EXAMPLE 3: CouponCrowd operates an online platform that sells coupons that can be redeemed by purchasers at various retail stores that have contracted with CouponCrowd to promote their businesses. CouponCrowd lists the coupons for sale, sells the coupons to purchasers, and processes payment for the purchase of the coupons. CouponCrowd is not a marketplace facilitator. The sale of a coupon is the sale of an intangible, not the sale of tangible personal property. Marketplace facilitators must engage in facilitating sales of tangible personal property.
EXAMPLE 4: Mandameal is an online and mobile food-ordering and delivery service. It works with a variety of partner restaurants by listing meals available for purchase and delivery. Customers place food orders using Mandameal, which then processes payments for the purchased meals and delivers the orders. Although Mandameal is considered a marketplace facilitator because it engages in each of the activities in subsection (c)(1), the provisions of this Section do not apply to it because the tax liability incurred for sales made using Mandameal is Retailers' Occupation Tax liability, not Use Tax liability. In this example, the business model and contract used by Mandameal demonstrate that liability for sales made over the platform is properly placed on the partner restaurants. Consequently, the partner restaurants must be registered as retailers and remit Retailers' Occupation Tax to the Department for all sales made using Mandameal. Even if the business model and contract used by Mandameal demonstrates that the liability for the sales made over the platform is instead properly placed on Mandameal, the provisions of this Section would still not apply, since the liability that Mandameal would incur in this case is Retailers' Occupation Tax liability, not Use Tax liability.
EXAMPLE 5: Visualeyes operates a specialized online marketplace that sells various brands of contact lenses to purchasers. Visualeyes makes purchases for resale from various suppliers of the contact lenses offered for sale on its marketplace. Its marketplace does not indicate to purchasers using the marketplace that the sales are made on behalf of any identified marketplace sellers. In this example, Visualeyes is not a marketplace facilitator. It is simply an online retailer making its own sales of contact lenses. Whether it is required to collect and remit taxes depends upon whether it has sufficient nexus with Illinois. (See, for example, Section 150.803.)
EXAMPLE: On December 15, 2019, a marketplace seller takes actions binding it to a sale that is scheduled for shipment on January 15, 2020. This sale must be included in the calculation used to determine the marketplace facilitator's sales transactions for its initial lookback period under subsection (e).
EXAMPLE 1: A purchaser orders 12 items of clothing from a marketplace seller. 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 marketplace seller. 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 marketplace seller. The marketplace seller confirms this order with a separate invoice. In this example, two different transactions have occurred. This is the case, even if the marketplace seller sends all the ordered tools to the purchaser in one package.
EXAMPLE 3: A mother places an order with Marketplace Seller B for care packages to be delivered to her son's dormitory at 8 scheduled intervals during the school year. Each delivery is separately invoiced. These are counted as 8 separate transactions.
EXAMPLE: Marketplace Seller A makes a sale of seedlings to Company B over a marketplace. 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). If the marketplace facilitator calculates its threshold using gross receipts, it should include only 40% of the gross receipts from this sale. If it calculates its threshold using transactions, however, the entire transaction with Company B must be included.
Ill. Admin. Code tit. 86, § 150.804