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 Illinoisans will pay higher sales taxes on online purchases
starting next year.
On Jan. 1, 2020, an expansion of the state’s sales tax will take effect, which
will require online marketplaces that facilitate sales between third-party
users, such as Etsy and eBay, to collect the 6.25% tax from online shoppers in
Illinois.
A second sales tax expansion taking effect Jan. 1 will require out-of-state
retail stores to begin collecting local sales taxes for online purchases, based
on the location of packages delivered to Illinois shoppers. Retailers based out
of state already collect the state sales tax from online shoppers in Illinois.
 In April 2018, the U.S. Supreme Court’s ruling in South Dakota v. Wayfair Inc.
allowed states to collect sales taxes on online purchases from out-of-state
sellers. Illinois began collecting the state’s sales tax from those stores in
October of that year.
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The tax expansion will especially hit Chicago
shoppers, who pay a combined state and local sales tax burden of
10.25%. Statewide, the average combined sales tax burden is 8.74%,
according to the Tax foundation. That’s the highest in the Midwest
and 7th-highest nationwide.
These changes come as part of 21 new tax and fee
increases totaling $4.7 billion passed by the General Assembly to
fund Pritzker’s infrastructure plan and the state’s operating budget
for fiscal year 2020.
The expanded online sales taxes could bring in $210 million combined
in their first year, and ultimately generate $420 million combined,
according to long-run estimates.
While some brick-and-mortar store owners may view the new online
sales taxes as leveling the playing field, Illinoisans shopping
online will see another spike in what’s already one of the highest
overall tax burdens in the nation.
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