- Retail sales of tangible personal property delivered into Illinois
- Sales of titled or registered motor vehicles, aircraft, and watercraft delivered into Illinois (included effective February 1, 2022)
- Both taxable and exempt sales count toward the $100,000 threshold
- Sales for resale (with a valid resale certificate)
- Occasional or isolated sales by those not regularly engaged in selling
- Sales made through a registered marketplace facilitator collecting and remitting Illinois tax on the business's behalf (effective January 1, 2020)
- Sales of titled or registered motor vehicles, aircraft, and watercraft prior to February 1, 2022
Affiliate nexus
Illinois codifies two distinct nexus-by-contract theories under 35 ILCS 105/2: click-through nexus and affiliate nexus. Both carry a $10,000 gross receipts threshold measured over the preceding four quarterly periods, and both are rebuttable.
Click-through nexus has been operative since January 1, 2015. A retailer is presumed to have nexus when it maintains a contract with an Illinois resident who, for a commission or other consideration, refers potential customers to the retailer through a promotional code, affiliate link, or other tracking mechanism. The presumption applies only when cumulative referred sales exceed $10,000 in the preceding four quarterly periods. The presumption is rebuttable.
Affiliate nexus has been operative since July 1, 2011. It is triggered when a retailer maintains a contract with an Illinois-based person or entity that both sells the same or substantially similar product line under an identical or substantially similar name or trademark, and receives a commission based on the retailer's Illinois sales. The same $10,000 threshold over four quarters applies. For purposes of this provision, an affiliate is defined as an entity with more than 5% direct or indirect ownership interest in the retailer. This presumption is also rebuttable.
Physical nexus
Under 35 ILCS 105/2, a retailer is considered to be maintaining a place of business in Illinois, and therefore has physical nexus, if it has or maintains, directly or through a subsidiary, any of the following: an office, distribution house, sales house, warehouse, or other place of business in Illinois; or any agent or other representative operating within Illinois under the authority of the retailer or its subsidiary. Physical presence creates nexus regardless of whether it is permanent or temporary.
Two safe harbors limit the reach of the physical presence standard. Under the printer's exception, property located at an Illinois commercial printer's premises solely for purposes of a printing contract does not constitute a place of business. Under the trade show safe harbor, attendance at no more than two trade shows, for no more than eight aggregate days per year, and with less than $10,000 in Illinois sales, does not create nexus.
Trailing nexus
Illinois explicitly codifies a trailing nexus rule, one of the few states to do so in formal guidance. Under the IDOR Sales Tax Audit Manual, Chapter 7, once a retailer meets the $100,000 threshold for a 12-month period, the retailer is considered to be maintaining a place of business in Illinois and must continue collecting and remitting Use Tax for one full year, regardless of whether activity subsequently drops below the threshold. This obligation runs for one year from the close of the qualifying 12-month period.
