35 ILCS 110/2d — Marketplace facilitators and marketplace servicemen

Sec. 2d. Marketplace facilitators and marketplace servicemen.

# (a)

Definitions. For purposes of this Section: "Affiliate" means a person that, with respect to another person: (i) has a direct or indirect ownership interest of more than 5% in the other person; or (ii) is related to the other person because a third person, or group of third persons who are affiliated with each other as defined in this subsection, 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 serviceman makes or offers to make sales of service. "Marketplace facilitator" means a person who, pursuant to an agreement with an unrelated third-party marketplace serviceman, directly or indirectly through one or more affiliates facilitates sales of service by that unrelated third-party marketplace serviceman through: (1) listing or advertising for sale by the marketplace serviceman in a marketplace, sales of service that are subject to tax under this Act; and (2) either directly or indirectly, through agreements or arrangements with third parties, collecting payment from the customer and transmitting that payment to the marketplace serviceman regardless of whether the marketplace facilitator receives compensation or other consideration in exchange for its services. "Marketplace serviceman" means a person that makes or offers to make a sale of service through a marketplace operated by an unrelated third-party marketplace facilitator.

# (b)

Beginning January 1, 2020 and through December 31, 2025, a marketplace facilitator who meets either of the following thresholds is considered the serviceman for each sale of service made through its marketplace: (1) the cumulative gross receipts from sales of service to purchasers in Illinois by the marketplace facilitator and by marketplace servicemen selling through the marketplace are $100,000 or more; or (2) the marketplace facilitator and marketplace servicemen selling through the marketplace cumulatively enter into 200 or more separate transactions for the sale of service to purchasers in Illinois. A marketplace facilitator shall determine on a quarterly basis, ending on the last day of March, June, September, and December, whether the marketplace facilitator meets the threshold of either paragraph (1) or (2) of this subsection (b) for the preceding 12-month period. If the marketplace facilitator meets the threshold of either paragraph (1) or (2) for a 12-month period, it is considered a serviceman maintaining a place of business in this State and is required to collect and remit the tax imposed under this Act and file returns for one year. At the end of that one-year period, the marketplace facilitator shall determine whether the marketplace facilitator met the threshold of either paragraph (1) or (2) during the preceding 12-month period. If the marketplace facilitator met the threshold in either paragraph (1) or (2) for the preceding 12-month period, it is considered a serviceman maintaining a place of business in this State and is required to collect and remit the tax imposed under this Act and file returns for the subsequent year. If, at the end of a one-year period, a marketplace facilitator that was required to collect and remit the tax imposed under this Act determines that it did not meet the threshold in either paragraph (1) or (2) during the preceding 12-month period, the marketplace facilitator shall subsequently determine on a quarterly basis, ending on the last day of March, June, September, and December, whether it meets the threshold of either paragraph (1) or (2) for the preceding 12-month period. (b-5) Beginning on January 1, 2026, a marketplace facilitator whose cumulative gross receipts from sales of service to purchasers in Illinois by the marketplace facilitator and by marketplace servicemen selling through the marketplace are $100,000 or more is engaged in the business of making sales of service in Illinois for purposes of this Act for each sale of service made through the marketplace. A marketplace facilitator shall determine on a quarterly basis, ending on the last day of March, June, September, and December, whether the marketplace facilitator meets the threshold in this subsection (b-5) for the preceding 12-month period. If the marketplace facilitator meets the threshold for a 12-month period, the marketplace facilitator is considered a serviceman maintaining a place of business in this State and is required to collect and remit the tax imposed under this Act and file returns for one year. At the end of the one-year period, the marketplace facilitator shall determine whether the marketplace facilitator met the threshold during the preceding 12-month period. If the marketplace facilitator met the threshold for the preceding 12-month period, the marketplace facilitator is considered a serviceman maintaining a place of business in this State and is required to collect and remit the tax imposed under this Act and file returns for the subsequent year. If at the end of a one-year period a marketplace facilitator that was required to collect and remit the tax imposed under this Act determines that the marketplace facilitator did not meet the threshold during the preceding 12-month period, the marketplace facilitator shall subsequently determine on a quarterly basis, ending on the last day of March, June, September, and December, whether it meets the threshold for the preceding 12-month period.

# (c)

A marketplace facilitator considered to be the serviceman pursuant to subsection (b) or, beginning January 1, 2026, subsection (b-5) of this Section is considered the serviceman for each sale of service made through its marketplace and is liable for collecting and remitting the tax under this Act on all such sales. The marketplace facilitator has all the rights and duties, and is required to comply with the same requirements and procedures, as all other servicemen maintaining a place of business in this State who are registered or who are required to be registered to collect and remit the tax imposed by this Act with respect to such sales.

# (d)

A marketplace facilitator shall: (1) certify to each marketplace serviceman that the marketplace facilitator assumes the rights and duties of a serviceman under this Act with respect to sales of service made by the marketplace serviceman through the marketplace; and (2) collect taxes imposed by this Act as required by Section 3-40 of this Act for sales of service made through the marketplace.

# (e)

A marketplace serviceman shall retain books and records for all sales of service made through a marketplace in accordance with the requirements of Section 11.

# (f)

A marketplace serviceman shall furnish to the marketplace facilitator information that is necessary for the marketplace facilitator to correctly collect and remit taxes for a sale of service. Such information includes the cost price of any item transferred incident to a sale of service under this Act when the cost price of an item exceeds 50% of the entire billing to the service customer of a sale of service made through the marketplace. The information may include a certification that an item transferred incident to a sale of service under this Act is taxable, not taxable, exempt from taxation, or taxable at a specified rate. A marketplace serviceman shall be held harmless for liability for the tax imposed under this Act when a marketplace facilitator fails to correctly collect and remit tax after having been provided with information by a marketplace serviceman to correctly collect and remit taxes imposed under this Act.

# (g)

If the marketplace facilitator demonstrates to the satisfaction of the Department that its failure to correctly collect and remit tax on a sale of service resulted from the marketplace facilitator's good faith reliance on incorrect or insufficient information provided by a marketplace serviceman, it shall be relieved of liability for the tax on that sale of service. In this case, a marketplace serviceman is liable for any resulting tax due.

# (h)

(Blank).

# (i)

This Section does not affect the tax liability of a purchaser under this Act.

# (j)

(Blank).

# (k)

A marketplace facilitator required to collect taxes imposed under this Section and this Act on sales of service made through its marketplace shall be liable to the Department for such taxes, except when the marketplace facilitator is relieved of the duty to remit such taxes by virtue of having paid to the Department taxes imposed by the Service Occupation Tax Act from the same transactions.

# (l)

If, for any reason, the Department is prohibited from enforcing the marketplace facilitator's duty under this Act to collect and remit taxes pursuant to this Section, the duty to collect and remit such taxes reverts to the marketplace serviceman that is a serviceman maintaining a place of business in this State pursuant to Section 2.

# (m)

Nothing in this Section affects the obligation of any consumer to remit service use tax for any taxable transaction for which a certified service provider acting on behalf of a serviceman maintaining a place of business in this State or a marketplace facilitator does not collect and remit the appropriate tax. (Source: P.A. 104-6, eff. 6-16-25.)