Maria Gordon

CPA | Tax Supervisor – SALT

Beginning January 1, 2025, all out-of-state shipments into Illinois will be subject to the Retailer’s Occupation Tax (ROT). This tax includes state and local sales taxes and is determined based on the destination of the sale.

Key Changes

Previously, Illinois retailers with a physical presence in the state who sold tangible personal property from locations outside Illinois were only required to charge Illinois Use Tax (state, not local tax) on such sales. Under the new regulations, such sales will be subject to ROT, including local taxes.

Who Is Affected

This change only applies to retailers with a physical presence in Illinois who make sales into Illinois from an out-of-state location. The change does not impact remote retailers with no physical presence in the state.

Further Guidance

The State of Illinois provides Bulletin FY 2025-10 to assist sellers in navigating these changes including  what actions to take in response to this change.

ROT Rules by Seller Type

 1. Illinois Retailers

Sellers with a physical presence in Illinois shipping from locations within the State must collect and remit ROT based on the origin of the shipment.

2. Out-of-State Sellers

Retailers with a physical presence in Illinois and shipping from both in-state and out-of-state locations follow these rules:

• In-State Shipments: ROT is sourced to the origination of the shipment
• Out-of-State Shipments: ROT is sourced to the destination of the shipment.

3. Remote Sellers

Retailers with no physical presence in Illinois who meet a threshold of $100,000 or more in gross receipts or 200 or more separate transactions must collect ROT based on the destination of the shipment.

Need Assistance

Cray Kaiser can answer your questions on the changing landscape of sales and use taxes. Please contact us here or call us at 630-953-4900 if you have any questions.