Illinois: The Prairie State

Illinois is located in the American Midwest and borders Lake Michigan to the northeast. The state rises over an area of ​​almost 150,000 km². It is limited, among other things, by the Mississippi and Ohio Rivers. It is traversed by various other rivers, such as the Illinois River or Kaskaskia River. According to ehuacom, Illinois’ only megacity is Chicago, the third largest in the entire USA. Of the nearly 13 million residents of the state, 2.7 million people reside in Chicago.

Illinois boasts a booming economy. This can be explained by taking advantage of the state’s unique transportation infrastructure, location, talented workforce, access to key markets and positive business climate. The state impresses with advantages for companies and workers.

Illinois Location Map

ECONOMIC STRENGTH AS A HALLMARK OF THE “PRAIRIE STATE”

Illinois has risen to become the 18th largest economy in the world. Over time, the state has attracted innovative, like well-known companies. Amazon, Caterpillar or Boeing have offices in “The Prairie State”. The more than 2,000 resident international companies, hailing from 74 nations, also include the headquarters of 37 Fortune 500 companies.

Site Selection Magazine ranked Illinois third among all states for new and expanding businesses in 2017. Chicago even ranked first among all metro areas in the country in this category.

Illinois’ economy is very diverse and boasts, among other things, the largest futures exchange in the world. Nearly 300,000 people are employed in advanced research. More than 100 of the leading biopharmaceutical companies call the state home. The state ranks second nationally in food processing. Illinois industry can be summarized with the word impressive. For domestic banks and holding companies, Chicago is the premier destination in the country. Financial services in general are a big part of Illinois’ fifth-highest gross domestic product nationally.

GLOBAL ACCESS FROM THE HEART OF THE USA

Strategically located in the middle of the country, Illinois is the hub of commerce. The entire North American market can be served from here within a four-hour flight. Chicago’s O’Hare International Airport is one of the busiest airports in the world and offers direct flights to 65 international business centers. The dual-hub airport system used is unique in North America.

Illinois is the only state with seven Class I railroad lines. The state has the third largest highway network in the United States. The intermodal port is the third largest in the world. Direct access to the Atlantic Ocean, the Great Lakes and the Gulf of Mexico is provided by Illinois’ 13 port counties. Chicago is the largest container hub in the western hemisphere, through which, among other things, 25 percent of all US freight traffic is moved. World-class infrastructure provides unparalleled access to global markets.

The digital infrastructure is also of excellent quality. Illinois also offers inexpensive energy, plentiful water and other natural resources.

HUGE TALENT POOL

One of the state’s greatest assets is its talent pool of nearly 6.5 million people. About a third of them have at least a bachelor’s degree. In Illinois, over 200 higher education institutions offer a broad and high-quality educational program. The Prairie State is also home to three national laboratories.

ILLINOIS INCOME TAX

Illinois charges an income tax of 4.95%. In addition, federal income taxes are payable.

ILLINOIS CORPORATE INCOME TAX

Illinois charges a 9.5% corporate income tax. In addition, federal corporation tax is payable.

ILLINOIS SALES TAX

There is no sales tax or Value Added Tax (VAT) in the USA based on the European model. Instead, in the United States, states, counties, and municipalities levy a local sales tax on the sale of products (but not services).

Illinois sales tax rate

The sales tax in Illinois is 6.25% at the state level. Municipalities or districts charge an average of 2.49% sales tax. Combined, an average of 8.74% is due.

Illinois Nexus Laws & Sales Tax

Learn more about the Economic Nexus Laws in the context of Sales Tax here.

Effective Date

October 1, 2018 (for State Use Tax)

January 1, 2021 (for local tax)

Transactions included:

Cumulative gross proceeds from sales of tangible personal property and real estate sold to a state service in the US, excluding occasional sales; taxable services are not included

– Effective January 1, 2020, sales made through a marketplace intermediary will be excluded from the threshold

Treatment of tax-exempt transactions:

Included are exempt sales, including exempt sales of real estate sold to a service; However, sales for resale are not included; exempt services are also not included in the threshold

Reason:

turnover or transaction volume

Sales/Transactions Threshold:

$100,000 or 200 transactions

Evaluation period:

Although the threshold applies to the previous 12 months, it must be determined on a quarterly basis. Additional exclusions exist for properties that must be registered with the state.

Extra information:

  • Registration Requirements: A remote business must report quarterly if it exceeded the Economic Nexus Threshold in Illinois in the immediately preceding 12 months. If so, it must register and begin collecting sales and use taxes by the first day of the next quarter. See F Y 2019-05for more details.
  • Use tax notices for remote sellers
  • Frequently asked questions for marketplace facilitators, marketplace sellers and remote sellers
  • Public Law 100-587

Illinois Marketplace Sellers & Sales Tax

Learn more about Marketplace seller registration requirements

Effective date by the marketplace broker:

January 1, 2020

Economic Nexus Threshold:

At least $100,000 in gross receipts from sales in Illinois or at least 200 transactions in the current or previous calendar year. When calculating the threshold:

  • Remote sellers should include sales made through a marketplace before January 1, 2020 and exclude them from January 1, 2020 onwards
  • Marketplace intermediaries should include all sales through the marketplace from January 1, 2020

Registration requirements:

  • Remote Multichannel Sellers: You must register with the Illinois Department of Revenue (DOR) and collect Illinois sales tax on sales that are not taxed by a Marketplace Agent once you have crossed the Economic Nexus Threshold.
  • Remote Marketplace Vendors: You must register with the Illinois DOR once you cross the Economic Nexus threshold, even if you only sell through one or two collection marketplaces. Contact the Illinois DOR for more information.
  • In-State Multichannel Sellers: You must register with the Illinois DOR and collect taxes on sales that are not taxed by a marketplace intermediary.
  • State Marketplace Sellers: You must register. Contact the Illinois DOR for more information.