Marketplace Facilitators – Obligations – Procedures – Hold Harmless Provisions

TITLE 86: REVENUE CHAPTER I: DEPARTMENT OF REVENUE PART 131 LEVELING THE PLAYING FIELD FOR ILLINOIS RETAIL ACT SECTION 131.145 MARKETPLACE FACILITATORS – OBLIGATIONS – PROCEDURES – HOLD HARMLESS PROVISIONS Section 131.145  Marketplace Facilitators – Obligations – Procedures – Hold Harmless Provisions a)         Marketplace facilitators meeting either of the thresholds in Section 131.135(a) are required to register with the Department, file returns and remit tax for all sales made over the marketplace to Illinois purchasers, including their own sales and sales made on behalf of marketplace sellers. b) A marketplace facilitator shall certify to each marketplace seller: 1) That the marketplace facilitator assumes the rights and duties of a retailer under ROTA and all applicable local retailers' occupation taxes administered by the Department with respect to sales made by the marketplace seller through the marketplace; and 2) That the marketplace facilitator will remit taxes imposed by the retailers' occupation tax and all applicable local retailers' occupation taxes administered by the Department for sales made through the marketplace. [35 ILCS 120/2(d)] c)         The marketplace facilitator shall recertify under subsection (b) annually. All certificates required under this Section 131.145 shall include the following information: 1)         the marketplace seller’s name, DBA (if applicable), address, and Illinois Account ID for sales tax or FEIN, or SSN if the marketplace seller does not have an Illinois Account ID or FEIN; 2)         the marketplace facilitator’s name, address, and Illinois Account ID used for sales on behalf of its marketplace sellers; 3)         the effective date of the certification; 4)         a description of the taxes being collected and remitted by the marketplace facilitator; 5)         the marketplace facilitator’s signature and date of signing; and 6)         any additional information that the Department may reasonably require. d) A marketplace facilitator is liable for the remittance of all applicable State and local retailers' occupation taxes administered by the Department on sales made on behalf of marketplace sellers on the marketplace, as well as its own sales made over the marketplace, and is subject to audit on all such sales.  A marketplace facilitator is not liable for tax on any sales made by a marketplace seller that take place outside of the marketplace and that are not a part of an agreement between a marketplace facilitator and a marketplace seller for the facilitation of sales by the marketplace seller over the marketplace. [35 ILCS 120/2(f)] e) Marketplace facilitators shall not be liable to State and local governments of Illinois for having charged and remitted an incorrect amount of State and local retailers' occupation tax if, at the time of the sale, the tax is computed based on erroneous data provided by the Department in database files on tax rates, boundaries, or taxing jurisdictions or on incorrect information provided to the marketplace facilitator by a marketplace seller. [35 ILCS 120/2(c)] (See also Section 131.150(b) and (c) for further information.) f)         A marketplace facilitator shall maintain books and records for sales made over the marketplace to Illinois purchasers on behalf of marketplace sellers in accordance with the requirements of Section 7 of ROTA. g) Marketplace facilitators shall file returns and remit tax on sales made over the marketplace to Illinois purchasers on behalf of marketplace sellers separately from any sales made directly by the marketplace facilitator itself. [35 ILCS 120/2(c)]  Marketplace facilitators must separately register with the Department to file and pay tax on their own sales; tax on those sales shall be reported and paid on a return separate from the return filed on behalf of marketplace sellers. h)         Marketplace facilitators are not authorized to file returns and remit tax on sales made by affiliates over the marketplace to Illinois purchasers unless the marketplace facilitator is acting as a certified CSP or CAS for the affiliate. i) A marketplace facilitator shall be entitled to any credits, deductions, or adjustments to the sales price otherwise provided to the marketplace seller, in addition to any such adjustments provided directly to the marketplace facilitator, such as discounts, coupons, and rebates. [35 ILCS 120/2(c)] For provisions regarding the taxation of rebates, discounts, and coupons, see 86 Ill. Adm. Code 130.2125. j) A marketplace facilitator shall be entitled to the retailers' discount as provided in Section 3 of ROTA on all marketplace sales made to Illinois purchasers on behalf of marketplace sellers. [35 ILCS 120/2(c)] k)         A marketplace is a location held out to the public as being habitually engaged in the selling of tangible personal property.  As such, no sales made on a marketplace are considered to be occasional sales (see 86 Ill. Adm. Code 130.110). l) The Department is prohibited from collecting State and local retailers' occupation taxes from both the marketplace facilitator and the marketplace seller on the same transaction. [35 ILCS 120/2(h)] m) Nothing in this Part affects the obligation of any consumer to remit use tax for any taxable transaction for which a marketplace facilitator does not collect and remit the appropriate tax. [35 ILCS 120/2(j)] n)         Unless otherwise provided to the contrary in this Part, a marketplace facilitator is subject to all the rights and duties, and is subject to the same modes of procedure, as all other retailers under ROTA with respect to sales made over the marketplace. o)         A marketplace facilitator must maintain books and records containing the name, address and FEIN of all marketplace sellers making sales through its marketplace and provide these records to the Department upon request. p)         A marketplace facilitator may make an exempt sale on behalf of a marketplace seller that possesses an active exemption identification number (E number) issued by the Department, if the sale made by the marketplace seller would qualify as one of the three limited types of tax-free selling authorized under 86 Ill. Adm. Code 130.2005(a)(1)-(4).  In order to document the exempt sale, the marketplace facilitator is required to obtain the active E number issued to the marketplace seller, along with a certification from the marketplace seller explaining the specific basis for exemption under 86 Ill. Adm. Code 130.2005(a)(1)-(4).