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More Online Retailers Collecting Illinois Sales Tax

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More online retailers are registering to collect Illinois' sales tax after new rules took effect last month.

If you shop online this holiday season, you’ll likely see more retailers charging you sales tax.

Hundreds more retailers have registered to collect the 6.25-percent tax from Illinois customers since new rules took effect last month.

Between July and October last year, the Illinois Department of Revenue saw around a hundred new businesses fill out the paperwork saying they’ll charge customers sales tax.

This year – there were more than four hundred.

“It tells us that folks are getting the word and coming into compliance with the new law,” said Terry Horstman, a spokesman for the agency.

The new rules expanded which businesses have to charge sales tax. Before it was only retailers with an office, shop or employees in the state. Now it includes any that sell more than $100,000 of goods to Illinois customers or make more than 200 transactions.

Rob Karr, president of the Illinois Retail Merchants Association, says he's satisfied with the rules implementation so far. The group, which represents retailrs big and small, lobbied for the rule change. 

"That playing field has been leveled," he said.

Lawmakers predicted the expansion would bring in around $200 million more every year. Horstman says it’s still too early to tell if they’re on track to hit that number.

The revenue department is also working with other states to enforce its new rules. Horstman said they’re sharing information on retailers with other states to see which may qualify under the new rules.

“Our first approach is to educate folks, make sure they’re aware of the new law, and to urge compliance,” he said. “And we’re working with other states to facilitate that as well.”

The new rules came after a June U.S. Supreme Court ruling opening the door for sales tax collection across state lines.

Several other states, including Indiana, have implemented similar rules. Iowa’s rules are set to take effect January 1.

Mary Hansen is a former NPR Illinois reporter.
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