Taxes / State tax rules / Illinois
Selling on eBay, Poshmark or Etsy from Illinois: sales tax and 1099-K rules
Since January 1, 2021, a marketplace facilitator that meets Illinois's threshold (from January 1, 2026, $100,000 in Illinois sales through its marketplace; before that, $100,000 or 200 transactions) collects and remits state and local retailers' occupation tax on all sales through its marketplace, and the Department of Revenue says sales it collects on are left off the seller's own Form ST-1. Illinois has its own 1099-K test: 35 ILCS 5/703A and IDOR Publication 110 have platforms report a payee with an Illinois address whose third-party network transactions total more than $1,000 in four or more transactions, far below the federal $20,000 and 200.
General information, not tax advice. Check with a tax professional about your own situation.
Checked against the official pages listed below on .
Illinois in short
- General sales tax:
- Yes, 6.25% state rate
- Marketplace facilitator law:
- Yes: Retailers' Occupation Tax Act (35 ILCS 120); 86 Ill. Adm. Code 131.145, since Jan 1, 2021
- When a marketplace must collect:
- from January 1, 2026, $100,000 or more in cumulative gross receipts from sales to Illinois purchasers through the marketplace (its own and its sellers'); from January 1, 2021 through December 31, 2025, that or 200 or more separate transactions
- Form 1099-K:
- State threshold: four or more separate transactions with a cumulative total over $1,000, for a payee with an Illinois address
Who collects the tax on a marketplace sale
When a marketplace facilitator meets a threshold, it registers with IDOR, files returns and remits state and local retailers' occupation tax for all sales made through the marketplace to Illinois purchasers, including its own sales and its marketplace sellers'. It must certify to each marketplace seller that it assumes the rights and duties of a retailer under the Retailers' Occupation Tax Act for the seller's marketplace sales.
If you sell only through marketplaces
IDOR's definitions treat a marketplace seller as someone selling through an unrelated facilitator who has obtained that certification. Its FAQ says sales made through a marketplace that is collecting and remitting taxes for you are not reported on your Form ST-1, and are not included and then deducted. The IDOR pages checked here don't separately say whether a seller with no direct sales must hold a registration.
Registration, resale certificates and what changes when you also sell direct have their own page: Illinois: seller's permit and resale certificate rules.
The law: Retailers' Occupation Tax Act (35 ILCS 120); 86 Ill. Adm. Code 131.145, effective .
"A marketplace facilitator shall certify to each marketplace seller that the marketplace facilitator will assume the rights and duties of a retailer under the ROT Act"
"Sales made through a marketplace that is collecting and remitting taxes for you are not reported on your Form ST-1."
Sources: Sales and Use Tax Definitions; Frequently Asked Questions (FAQs) for Marketplace Facilitators, Marketplace Sellers, and Remote Retailers.
Illinois's sales tax
The Illinois Department of Revenue (IDOR) gives the statewide rate for general merchandise as 6.25%, the flat Use Tax rate. A marketplace facilitator's sales for its sellers are taxed at the destination rate: the total state and local retailers' occupation tax rate where the item is delivered.
Sources: Sales and Use Tax Definitions.
Form 1099-K: Illinois and the federal test
Section 703A of the Illinois Income Tax Act has anyone filing federal Forms 1099-K for payees with an Illinois address send the Department a copy, and, for reporting periods from January 1, 2020, report third-party network transactions to the Department and the payee without the federal de minimis limits when, in the period, they total more than $1,000 and number more than 3. IDOR Publication 110 (January 2026) words the test as four or more separate transactions with a cumulative total over $1,000, and says Forms 1099-K go through the Illinois FIRE Electronic Transmission Program, not MyTax Illinois, by March 31, 2026 for the 2025 forms.
| Test | Dollar amount | Transactions | Wording |
|---|---|---|---|
| Illinois | $1,000 | 4 or more | four or more separate transactions with a cumulative total over $1,000, for a payee with an Illinois address |
| Federal (IRS) | Over $20,000 | More than 200 | Over $20,000 in more than 200 transactions, through one app or marketplace in a calendar year |
"You are required to submit Forms 1099-K, Payment Card and Third Party Network Transactions, issued to a payee with an Illinois address electronically if:"
"the payee has four or more separate transactions, and the cumulative total exceeds $1,000."
"if, in that reporting period, the amount of those transactions exceeds $1,000 and the aggregate number of those transactions exceeds 3"
Rule: 35 ILCS 5/703A (Illinois Income Tax Act § 703A, as amended by P.A. 101-10). Applies from: reporting periods beginning on or after January 1, 2020.
The federal test, for comparison: the IRS says a payment app or online marketplace must send a Form 1099-K when payments for goods or services total over $20,000 in more than 200 transactions, and adds: "However, they may send you a Form 1099-K with lower amounts and/or transactions." (Understanding your Form 1099-K, reviewed ). The Instructions for Form 1099-K count both parts for the calendar year, through each platform separately, and say the box 1a gross amount is figured without adjustments for credits, discounts, fees, refunds or shipping, so a 1099-K figure is not the same as profit. More on the federal rule in Form 1099-K for resellers.
Sources: 35 ILCS 5/703A. Information for reportable payment transactions; Publication 110, Forms W-2, W-2c, W-2G, and 1099 Filing and Storage Requirements for Employers and Payers, including 1099-K Electronic Filing Requirements; Electronic W-2 and 1099 Transmittal Programs.
Worked examples
$1,200 of sales in 15 orders
An Illinois seller with $1,200 in 15 transactions on one platform passes the Illinois test (four or more transactions, total over $1,000) though not the federal one (over $20,000 in more than 200 transactions), so Publication 110 requires the platform to submit a 1099-K for the seller to IDOR.
Exactly $1,000, or $5,000 in three sales
$1,000 in 10 transactions doesn't exceed $1,000, so the test isn't met on the wording of Section 703A and Publication 110. $5,000 in three transactions fails the four-transaction part. In either case a platform may still send a 1099-K.
Edge cases and details
- The 200-transaction threshold for marketplace facilitators and remote retailers ended December 31, 2025; from January 1, 2026, only the $100,000 gross receipts threshold applies, according to IDOR's definitions page.
- Use Tax is not destination-based and is a flat 6.25% for general merchandise statewide, IDOR says, while facilitators' sales for sellers are taxed at the destination's combined retailers' occupation tax rate.
- IDOR's FAQ says an out-of-state retailer whose Illinois inventory is used strictly to fulfill marketplace orders doesn't get physical-presence nexus from it, and is a remote retailer.
- Forms 1099-K can't be submitted on MyTax Illinois: Publication 110 says they go through the Illinois FIRE Electronic Transmission Program, and IDOR's electronic transmittal page adds that it doesn't accept Forms 1099-K by mail from payers required to submit them electronically.
- Section 703A says the Department shall not share information gathered from third party settlement organizations with other federal, state or local government entities, and that failing to provide the required information draws the penalty for failure to file an information return.
What to do
- Keep each marketplace's certification that it assumes the retailer's duties, and its sales report showing the tax it collected.
- If you also sell directly, report only those non-marketplace sales on Form ST-1, as IDOR's FAQ describes.
- Expect a 1099-K from a platform once you pass four transactions and $1,000 in a year, and compare it with the platform's sales report; check with a tax professional about how it fits your returns.
Common questions
Why did I get a 1099-K for about $1,000 of sales in Illinois?
Illinois requires a 1099-K report for a payee with an Illinois address whose third-party network transactions in the year total more than $1,000 in four or more transactions (35 ILCS 5/703A; IDOR Publication 110), far below the federal $20,000 and 200.
Do I report my eBay or Etsy sales on my Illinois ST-1?
IDOR's FAQ says sales made through a marketplace that is collecting and remitting taxes for you are not reported on your Form ST-1, and are not included and then deducted. Your own non-marketplace sales are reported.
Related
- Every state on one table: sales tax, marketplace facilitator laws and 1099-K rules
- Illinois: seller's permit and resale certificate rules
- Idaho: sales tax and 1099-K rules
- Indiana: sales tax and 1099-K rules
- Form 1099-K for resellers: the federal test
- Do eBay's fees apply to the sales tax a buyer pays?
- Where each selling app keeps its sales report
General information, not tax advice
This page summarizes Illinois's own published pages and statutes as read on , and the IRS's 1099-K pages. It doesn't say what you should file, register for or pay. Rules depend on your situation and change: check with a tax professional, or with the state's revenue department.
Sources
Official pages this page is built from, with the day each was read.
- Illinois General Assembly: 35 ILCS 5/703A. Information for reportable payment transactions; read . Copies of federal 1099-Ks for Illinois payees; from 2020, reporting without the federal de minimis limits over $1,000 and more than 3 transactions; no sharing; penalty.
- Illinois Department of Revenue: Sales and Use Tax Definitions; read . Marketplace facilitator and seller definitions, certification, thresholds before and after January 1, 2026, destination rate, 6.25% Use Tax.
- Illinois Department of Revenue: Frequently Asked Questions (FAQs) for Marketplace Facilitators, Marketplace Sellers, and Remote Retailers; read . Marketplace sales left off Form ST-1; inventory and nexus.
- Illinois Department of Revenue: Publication 110, Forms W-2, W-2c, W-2G, and 1099 Filing and Storage Requirements for Employers and Payers, including 1099-K Electronic Filing Requirements; read . 1099-K filing test (four transactions, over $1,000), Illinois FIRE, March 31, 2026 due date.
- Illinois Department of Revenue: Electronic W-2 and 1099 Transmittal Programs; read . Electronic filing method for Form 1099-K; same test.
- IRS: Understanding your Form 1099-K, reviewed . The federal 1099-K test.
- IRS: Instructions for Form 1099-K, reviewed . Both parts of the federal test counted for the calendar year.
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