Does a company that only shows ads linking to a retailer's own checkout page, without ever collecting or transmitting the customer's payment, count as a 'marketplace facilitator' that must collect Illinois sales tax?

Plain-English summary

An advertising company asked the Illinois Department of Revenue to confirm that three of its ad formats do not make it a "marketplace facilitator" required to collect Illinois sales tax on behalf of the merchants (Advertisers) whose products it advertises. In all three formats, the company shows product ads on its own websites/apps ("Surfaces"), and clicking an ad sends the shopper to the Advertiser's own website (or a third party's checkout) to actually buy the item — the differences were mostly cosmetic: one used a plain in-app browser, one added a company-branded checkout "bottom sheet" that just passes the shopper's info along, and one let shoppers build a cart on the company's own Surface before being handed off to the Advertiser's checkout.

The Department agreed with the company's position, but the ruling — being a General Information Letter (GIL), not a Private Letter Ruling — restates the general rule rather than issuing a binding, fact-specific holding tied to this taxpayer. Under 86 Ill. Adm. Code 131.130(a), a marketplace facilitator must (1) list or advertise a seller's taxable goods AND (2) directly or indirectly collect payment from the customer and transmit it to the seller. Advertising alone — even listing products for sale — does not satisfy the second prong. The Department's actual response states: "if a customer is redirected from an advertiser's platform to a retailer's website where payment occurs without any further participation by the advertiser, such advertiser is not acting as a marketplace facilitator," and that an advertising-only platform where "all payments for tangible personal property are made either directly to the retailer or to a third-party with whom the retailer has contracted" does not act as a marketplace facilitator, regardless of whether the checkout screen bears the platform's own branding.

What this means for you

Ad-tech and marketplace platforms

Merely displaying ads, product images, and prices — and even letting a shopper build a cart or see a co-branded checkout overlay — does not turn your platform into a marketplace facilitator under Illinois law, as long as you never yourself collect the customer's payment and pass it to the seller, directly or indirectly. What matters functionally is who actually processes the payment and transmits it to the seller, not how the interface looks or which brand appears on screen.

Retailers and Advertisers who sell through ad platforms

If your buyers complete checkout, payment, and fulfillment entirely on your own site (or through your own contracted payment processor), the platform advertising your products is not automatically a "marketplace" that shifts your Illinois sales-tax collection duty onto the platform. You (the marketplace seller/retailer) generally remain responsible for your own state and local retailers' occupation tax remittance in that situation. Contrast this with true marketplaces (Department Example 5, an online food-ordering/delivery service that itself takes orders and remits payment to restaurants) — those platforms ARE marketplace facilitators and must register, collect, and remit tax on all sales made through them once they cross Illinois's economic-nexus thresholds.

Accountants and tax professionals

The ruling turns entirely on the second prong of the two-part test in 86 Ill. Adm. Code 131.130(a) — collecting and transmitting payment — since the Department did not need to reach whether the first prong (listing/advertising) was satisfied. Branding on a checkout screen, or hosting a shopping cart, is not itself "collecting payment," and the fact that a third party (not the platform) contracts directly with the Advertiser for payment processing keeps the platform out of the definition, both "functionally" and under ordinary statutory-construction principles for "agreement" and "arrangement." Remember this is a GIL: it is not binding on the Department and cannot be relied on the way a PLR could, and it does not address the $100,000/200-transaction economic-nexus thresholds under 86 Ill. Adm. Code 131.135(a), which the requester asked the Department to assume were already met.

Businesses weighing marketplace-facilitator registration

If you operate a platform that both lists third-party goods and also collects customer payments (directly or through your own payment arrangement) and transmits them to the seller, you likely ARE a marketplace facilitator once you hit the $100,000 in Illinois sales or 200 Illinois transactions threshold, and you would need to register, file returns, and remit Illinois state and local retailers' occupation tax on all sales made through your platform — your own sales and your marketplace sellers' sales alike.

Common questions

Q: Does hosting an in-app browser or a branded checkout overlay make an advertising platform a marketplace facilitator?
A: No, not by itself. The Department said branding on a checkout screen does not show that the platform is a party to collecting or transmitting the customer's payment, as long as the actual payment processing, order confirmation, and fulfillment happen through the retailer's or its own third party's systems.

Q: What if shoppers can add items to a cart directly on the advertising platform?
A: Still not enough on its own. In the ruling's third ad format, shoppers built a cart on the company's own Surface, but checkout, payment, and order confirmation all occurred on the Advertiser's or its third party's site, and the Department treated that the same as the other two formats.

Q: What actually makes a platform a "marketplace facilitator" in Illinois?
A: Two things together: (1) listing or advertising a seller's taxable tangible personal property in a marketplace, AND (2) directly or indirectly collecting payment from the customer and transmitting it to the seller. Both prongs must be met; advertising alone is expressly carved out under 86 Ill. Adm. Code 131.130(a)(2).

Q: Is this GIL binding on the Department or on other taxpayers?
A: No. A General Information Letter is not a statement of Department policy and is not binding on the Department, unlike a Private Letter Ruling. The requester here specifically proceeded without disclosing its identity, so it did not get PLR-level protection either.

Q: When does a marketplace facilitator have to start collecting Illinois sales tax?
A: Once its cumulative Illinois sales (combined with its marketplace sellers') reach $100,000, or it and its sellers cumulatively have 200 or more separate Illinois transactions, under 86 Ill. Adm. Code 131.135(a). This GIL assumed that threshold question away and focused only on whether the company met the definition of "marketplace facilitator" at all.

Citations and references

Statutes and regulations:

• 35 ILCS 120/1 (Retailers' Occupation Tax Act — marketplace, marketplace facilitator, marketplace seller definitions)
• 35 ILCS 120/2(h) (no double collection of tax on the same transaction)
• 86 Ill. Adm. Code 130.101 (Retailers' Occupation Tax imposed on retail sales)
• 86 Ill. Adm. Code 150.101 (Use Tax imposed on the privilege of using property purchased at retail)
• 86 Ill. Adm. Code 131.101, 131.105 (marketplace and marketplace facilitator definitions)
• 86 Ill. Adm. Code 131.130(a) and (a)(2) (two-prong marketplace facilitator test; advertising-services carve-out)
• 86 Ill. Adm. Code 131.130(g) (illustrative examples, including the food-delivery marketplace example)
• 86 Ill. Adm. Code 131.135(a) ($100,000 / 200-transaction economic nexus thresholds)
• 86 Ill. Adm. Code 131.145(a)-(d), (k) (marketplace facilitator registration, remittance, and liability)
• 86 Ill. Adm. Code 131.150(a), (h) (marketplace seller liability)
• 86 Ill. Adm. Code 131.107(c) (other, non-ROT taxes remain the seller's responsibility)
• 2 Ill. Adm. Code 1200.110 (Private Letter Ruling procedure)
• 2 Ill. Adm. Code 1200.120 (General Information Letter procedure)

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2025.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2025/st25-0027-gil.pdf

Original ruling text

ST 25-0027-GIL 04/28/2025 MARKETPLACE FACILITATORS
This letter provides information regarding Retailers’ Occupation Tax collection
obligation of Marketplace Facilitators. See 86 Ill. Adm. Code 131. (This is a GIL.)
April 28, 2025
NAME
COMPANY1
ADDRESS
Dear NAME:
This letter is in response to your letter dated March 25, 2025, in which you requested
information. The Department issues two types of letter rulings. Private Letter Rulings (“PLRs”)
are issued by the Department in response to specific taxpayer inquiries concerning the
application of a tax statute or rule to a particular fact situation. A PLR is binding on the
Department, but only as to the taxpayer who is the subject of the request for ruling and only to
the extent the facts recited in the PLR are correct and complete. Persons seeking PLRs must
comply with the procedures for PLRs found in the Department’s regulations at 2 Ill. Adm. Code
1200.110. The purpose of a General Information Letter (“GIL”) is to direct taxpayers to
Department regulations or other sources of information regarding the topic about which they
have inquired. A GIL is not a statement of Department policy and is not binding on the
Department. See 2 Ill. Adm. Code 1200.120. You may access our website at
https://tax.illinois.gov/ to review regulations, letter rulings and other types of information
relevant to your inquiry.
The nature of your inquiry and the information you have provided require that we
respond with a GIL. In your letter you have stated and made inquiry as follows:
COMPANY1 (“COMPANY1” or “we”) represents a company (“Company”) that
provides advertising services. For the reasons set forth below, we are
requesting that the Illinois Department of Revenue (“Department”) issue a
General Information Letter (“GIL”) confirming that Company’s services do not
meet the definition of a marketplace facilitator under Illinois’ Sales and Use
Tax Law. Because we are not presently providing Company’s identity,
Company understands that it will not enjoy the protection of 2 Ill. Admin. Code
1200.110 with respect to the written guidance the Department provides in
response to this correspondence.
Also, for ease of review, it is assumed that Company meets economic nexus
thresholds for purposes of this GIL request only. The Company is not
requesting that the Department opine on a nexus question, rather, only those

COMPANY1/NAME
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April 28, 2025
questions related to whether the Company is considered a marketplace
facilitator under Illinois’ Sales and Use Tax Law.
Company Overview
Company is publicly traded and incorporated in the state of Delaware.
Company owns and operates technology platforms accessible online via
websites and downloadable apps (collectively, “Surfaces”). This request
focuses on three hypothetical advertising services (collectively, “Ad
Services”) Company offers or could offer that assist third-party businesses
(“Advertisers”) with the promotion and marketing of Advertisers’ products on
Company’s Surfaces. These Ad Services are technology enabled to increase
the efficacy and return of investment on an advertisement. Advertiser is
responsible for providing the content to utilize the Ads Services, including
images, text, product descriptions, configuration options, links, pricing, as
well as defining the period as to when the product in an Ad will be displayed.
The price of Company’s Ad Services is flexible but consistent across offerings.
Generally, an Advertiser will set either a daily or lifetime budget, and Company
will create a campaign based on the content and data approved by Advertiser.
Company will charge Advertisers as ads are displayed at various thresholds.
The pricing of the ad campaign depends on consumer interaction (i.e., views,
ad-clicks, etc.) with the ad across all three potential offerings. However, the
flow of the ad module and subsequent purchasing activity will differ between
the offerings as described in more detail below. Company does not
separately charge Advertisers for any of the technology features discussed
below nor is Company compensated for any subsequent purchasing activity.
Ad Service 1
Ad Service 1 allows Advertisers to create an advertising campaign on
Company’s platform that targets consumers based on their interests (“Ad
Consumer”). Under this offering, Company creates and delivers a technology
enabled ad to a consumer on a Surface. The technology features generally
include a gallery of product images selected by Advertiser. The images may be
a gallery for the same product or may be different products offered for sale by
Advertiser. Each product is linked to that specific item’s product details page
on an Advertiser’s third-party website. Once redirected via an in-app browser,
a consumer can purchase an item via Advertiser’s website, browse other
items on Advertiser’s website or engage in other shopping-related activities
directly with Advertiser. The in-app browser is labeled as a Company browser,
but that is purely for data privacy purposes so that an Ad Consumer
understands that he/she is navigating via a Company-hosted browser and that

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Company may collect data from the Ad Consumer via Company’s in-app
browser or other pixel data. Company does not take orders, perform payment
processing, fulfill or store items, set prices, or perform any post-purchasing
activities such as customer service or the execution of refunds and
exchanges, nor do any of its affiliates. Rather, all activity other than viewing
the ad occurs on Advertiser’s website, through a Company-hosted in-app
browser. Finally, because Ad Consumer views Advertiser’s products and
completes the transaction on Advertiser’s site, Company’s brand is not
associated with any checkout processes.
The chart below represents the respective activities performed on a
Company’s Surface versus those performed by Advertiser for Ad Service 1.

Ad Service 2
Ad Service 2 is the same as Ad Service 1, except that, while completing a
checkout on Advertiser’s site, a Company branded bottom sheet appears
where customer information, including payment details, are passed to a thirdparty advertiser’s website to complete checkout, payment processing, order
confirmation, fulfillment, and post order management. For the avoidance of
doubt, the product details page, cart, payment processing, order
confirmation, fulfilment, and post order management flow is owned by
Advertiser.
Under this offering, Company creates and delivers a technology enabled ad to
a consumer on a Surface. The technology features generally include a gallery
of product images selected by Advertiser. The images may be a gallery for the
same product or may be different products offered for sale by Advertiser. Each
product is linked to that specific item’s product details page on an Advertiser’s
third-party website. Once redirected to Advertiser’s website via an in-app
browser, a consumer can make purchases from Advertiser, browse other
items on Advertiser’s website, or engage in other shopping-related activities
directly with Advertiser.
The in-app browser is labeled as a Company browser, but that is purely for
data privacy purposes, so that an Ad Consumer understands that he/she is
navigating via a Company-hosted browser and that Company may collect data
from the Ad Consumer via Company’s in-app browser or other pixel data.
Company does not take orders, process payment, fulfill or store items, set

COMPANY1/NAME
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prices, or perform any post-purchasing activities such as customer service or
the execution of refunds and exchanges, nor do any of its affiliates.
In this scenario, in contrast to Ad Service 1, a Company-branded bottom sheet
appears at checkout, in which secured credentials and other data elements
are passed to Advertiser via a third-party service provider who facilitates the
transaction, and the Ad Consumer must review and confirm, but Advertiser
completes checkout and processes payment. Company’s branding is the
primary branding the Ad Consumer sees on the bottom sheet, but the
Checkout still occurs on Advertiser’s site. Advertiser completes the
transaction with no Company branding on their own website and completes
payment processing, order confirmation, fulfillment, and post order
management as in Ad Service 1.
The chart below represents the respective activities performed on a
Company’s Surface versus those performed by Advertiser for Ad Service 2.

Ad Service 3
Ad Service 3 is the same as Ad Service 1, except the link in the ad is to the
specific item’s product description page on Company’s Surface and Ad
Consumers can add items to a shopping cart on Company’s Surface. For ease
of reference, we will refer to the shopping cart as a cart, however, it is merely an
internet link that passes or refers information to the Advertiser or Advertiser’s
third-party technology provider.
The product description page is created by Advertiser on Company Surface
and displays images of the product, along with a description of it. Advertisers
can also add options to specify the size, color, quantity, or other configuration
of the product.
When an Ad Consumer selects “add to cart,” on the product detail page, the
item is added to a cart on Company’s Surface along with any customizations
specified (size, quantity, etc.). Once an item is added to a cart, Ad Consumers
can navigate to other products to review or click checkout. Upon selecting
checkout (or similar option) on Company’s Surface, Ad Consumer’s cart is
opened via an internet link on a site powered by Advertiser or Advertiser’s
third-party technology provider (“Third Party”) through Company’s in-app

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browser. The shopping cart detail sent via the internet link includes a variety
of information relating to the product, such as sizing, quantity, etc. However,
no customer, payment information, or other checkout information such as
billing or shipping address are included in this transfer of information. All that
detail is entered on the checkout platform operated by Advertiser/Third Party.
The cart merely includes product information. An Ad Consumer can choose to
abandon their cart at any point in time while on Company’s Surface without
completing an order. If they do so, Company may send reminders to Ad
Consumer of the products and/or their cart. Further, an Ad Consumer can
abandon the cart even after the product information is passed to
Advertiser/Third Party before completing the purchase.
Order initiation, order processing, and payment processing occur directly
with Advertiser/Third Party. Upon order completion within Advertiser/ThirdParty’s system, Ad Consumer remains on Advertiser’s checkout platform for
order confirmation. Company does not take orders, perform any payment
processing or fulfillment activities, and does not store items, set prices, or
participate in any post- purchasing activities such as customer service or the
execution of refunds and exchanges, nor do any of its affiliates. The checkout
process is not associated with Company’s brand and Ad Consumers do not
see Company’s branding on the platform on which the purchase transaction
is processed.
The chart below represents the respective activities performed on a
Company’s Surface versus those performed by Advertiser for Ad Service 3.

Ruling Requested
1)
2)
3)

Company is not acting as a marketplace facilitator for purposes
of the Ad Service 1 as they do not meet the definition of a
marketplace facilitator under 86 Ill. Adm. Code 131.130(a).
Company is not acting as a marketplace facilitator for purposes
of the Ad Service 2 as they do not meet the definition of a
marketplace facilitator under 86 Ill. Adm. Code 131.130(a).
Company is not acting as a marketplace facilitator for purposes
of the Ad Service 3 as they do not meet the definition of a
marketplace facilitator under 86 Ill. Adm. Code 131.130(a).

Relevant Authority

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As provided in 35 ILCS 120/1, 86 Ill. Adm. Code 131.105, and 86 Ill. Adm.
Code 131.130(a) a marketplace facilitator is defined as follows:
“Marketplace facilitator” means a person who, pursuant to an
agreement with an unrelated third-party marketplace seller, directly or
indirectly through one or more affiliates facilitates a retail sale by an
unrelated third-party marketplace seller by:
(1)
(2)

listing or advertising for sale by the marketplace seller in a
marketplace, tangible personal property that is subject to tax
under this Act; and
either directly or indirectly, through agreements or
arrangements with third parties, collecting payment from the
customer and transmitting that payment to the marketplace
seller regardless of whether the marketplace facilitator
receives compensation or other consideration in exchange for
its services.

A person who provides advertising services, including listing products
for sale, is not considered a marketplace facilitator, so long as the
advertising service platform or forum does not engage, directly or
indirectly through one or more affiliated persons, in the activities
described in paragraph (2) of this definition of “marketplace
facilitator”.
35 ILCS 120/1 and 86 Ill. Adm. Code 131.105 also defines a “Marketplace” as a
physical or electronic place, forum, platform, application, or other method by
which a marketplace seller sells or offers to sell items.
Additionally, 86 Ill. Adm. Code 131.130(a)(2) specifically notes that “[a]
person who provides advertising services, including listing products for sale,
is not considered a marketplace facilitator, so long as the advertising service
platform or forum does not engage, directly or indirectly through one or more
affiliated persons, in the activities described in subsection (a)(1)(B). [35 ILCS
120/1].”
86 Ill. Adm. Code 131.130(g) provides several examples for what are and are
not marketplace facilitators.
EXAMPLE 1: Carabibi, a social media network, provides a forum in which
persons using the network can buy and sell used tangible personal property.
Carabibi functions solely as an advertising platform bringing buyers and
sellers together. Once the buyer and seller have contacted each other over

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the network, they must negotiate the sale and make payment arrangements
themselves. While the forum provided by Carabibi constitutes a marketplace
as defined in Section 131.101, Carabibi is not considered a marketplace
facilitator because it does not engage in the activities described in subsection
(a)(1)(B).
EXAMPLE 2: Paymate is a payment processing business appointed by
merchants to handle payment transactions from various channels, such as
credit cards and debit cards. Its sole activity with respect to marketplace sales
is to handle financial transactions between two parties on the marketplace.
Paymate is not a marketplace facilitator because it does not engage in the
activities described in subsection (a)(1)(A).
EXAMPLE 5: Mandameal.com is an online and mobile food-ordering and
delivery service that enters into over 200 transactions with Illinois purchasers.
It contracts with a variety of restaurants by advertising meals available for
purchase from restaurants; it also offers delivery service for the food orders.
Customers place food orders using the Mandameal application or through its
online website. Mandameal.com accepts payments from customers,
completes the orders with the restaurants, and transmits payment on a
regular basis to the restaurants. Mandameal.com engages in activities that
make it a marketplace facilitator. …
Discussion
1)

Company is not acting as a marketplace facilitator for purposes of
the Ad Service 1 as it does not meet the definition of a marketplace
facilitator under 86 Ill. Adm. Code 131.130(a).

Illinois defines a marketplace facilitator as a person who, pursuant to an
agreement with an unrelated third-party marketplace seller, directly or
indirectly through one or more affiliates, facilitates a retail sale by an
unrelated third-party marketplace seller by (1) listing or advertising for sale,
by the marketplace seller in a marketplace, tangible personal property that is
subject to tax under the Retailers' Occupation Tax Act; and (2) either directly
or indirectly, through agreements or arrangements with third parties,
collecting payment from the customer and transmitting that payment to the
marketplace seller regardless of whether the marketplace facilitator receives
compensation or other consideration in exchange for its services. Company
does not meet the second prong because it does not directly or indirectly
collect the payment from the customer and transmit it to the seller.
Accordingly, Company is not a marketplace facilitator with respect to Ad
Services 1.

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a.

Tangible personal property is advertised on Company’s Surface

Under the first prong, Illinois requires a marketplace facilitator to facilitate a
retail sale by an unrelated third-party marketplace seller by listing or
advertising for sale. As stated above, Illinois defines a “marketplace” to mean
a physical or electronic place, forum, platform, application, or other method
by which a marketplace seller sells or offers to sell items. 86 Ill. Adm. Code
131.105.
In this scenario, Company operates Surfaces that allow Advertisers to place
technology enabled ads to advertise products and services for sale to
potential customers (i.e., Ad Consumers). Ad Consumers can interact with an
ad and initiate a variety of activity, both on the Company Surface such as
viewing products and pricing, as well as off the Surface such as creating a cart
and processing payments. As such, Company is merely an advertising service
provider as clarified in 86 Ill. Adm. Code 131.130(a)(2).
b.

Company does not, directly or indirectly, through agreements or
arrangements with third parties, collect payment from the
customer and transmit payment to the marketplace seller
under 86 Ill. Adm. Code 131.130(a).

Regardless of whether Company meets the first prong under the definition of
a marketplace facilitator in Illinois, Company does not meet the second
prong. The ads that Company produces and displays on its Surfaces may
include pictures, sales prices, and an internet link to the Advertiser’s website;
however, the Company takes no further steps to facilitate a sale. Upon
clicking the hyperlink, potential customers are redirected off Company’s
Surface to the Advertiser’s website on which all purchasing activity takes
place including completing orders, payment processing, and fulfillment
services. Company does not directly or indirectly collect payments from the
customer and transmit that back to Advertiser (i.e., seller). 1 Rather, under Ad
Service 1, the Ad Consumer (i.e., customer) is coordinating directly with
Advertiser or an Advertiser’s payment processor. As such, Company does not
directly or indirectly collect payment from the customer and transmit it to the
seller.
Therefore, the Company is not considered a marketplace facilitator in Illinois
with respect to Ad Service 1 because the Company does not meet the second
prong under 86 Ill. Adm. Code 131.130(a) and is considered merely an

Any agreements for order and/or payment processing are solely between Advertiser and the Third-Party related to
order processing and payment processing.

1

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advertising service provider as clarified in 86 Ill. Adm. Code 131.130(a)(2).
2)

Company is not acting as a marketplace facilitator for purposes of
the Ad Service 2 as it does not meet the definition of a marketplace
facilitator under 86 Ill. Adm. Code 131.130(a).

A marketplace facilitator in Illinois is defined as a person who, pursuant to an
agreement with an unrelated third-party marketplace seller, directly or
indirectly through one or more affiliates, facilitates a retail sale by an
unrelated third-party marketplace seller by (1) listing or advertising for sale,
by the marketplace seller in a marketplace, tangible personal property that is
subject to tax under the Retailers' Occupation Tax Act; and (2) either directly
or indirectly, through agreements or arrangements with third parties,
collecting payment from the customer and transmitting that payment to the
marketplace seller regardless of whether the marketplace facilitator receives
compensation or other consideration in exchange for its services. 86 Ill. Adm.
Code 131.105. Company is not a marketplace facilitator with respect to
transactions that occur under Ad Service 2 because the transactions do not
meet the second prong under the definition of a marketplace facilitator.
a.

Tangible personal property is advertised on Company’s
Surface.

Under the first prong, Illinois requires a marketplace facilitator to facilitate a
retail sale by an unrelated third-party marketplace seller by listing or
advertising for sale. As stated above, Illinois defines a “marketplace” to mean
a physical or electronic place, forum, platform, application, or other method
by which a marketplace seller sells or offers to sell items. 86 Ill. Adm. Code
131.105.
In this scenario, Company operates Surfaces that allow Advertisers to place
technology enabled ads to advertise products and services for sale to
potential customers (i.e., Ad Consumers). Ad Consumers can interact with an
ad and initiate a variety of activity, both on the Company Surface such as
viewing products and pricing, as well as off the Surface such as creating a cart
and processing payments. As such, Company is merely an advertising service
provider as clarified in 86 Ill. Adm. Code 131.130(a)(2).
b.

Company does not, directly or indirectly, through agreements or
arrangements with third parties, collect payment from the
customer and transmit all or part of the payment to the
marketplace seller under 86 Ill. Adm. Code 131.130(a).

Regardless of whether Company meets the first prong under the definition of

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a marketplace facilitator in Illinois, Company does not meet the second prong
with respect to Ad Service 2. The ads that Company produces and displays on
its Surfaces include pictures, sales prices, and an internet link to the
Advertiser’s website; however, the Company takes no further steps to
facilitate a sale or transmit payments between the payment processor and the
seller (i.e., Advertiser). As such, the second prong of the definition of a
marketplace facilitator is not met as discussed in detail below.
i.

Company does not meet the second prong of the
definition from a functional perspective.

Under Ad Service 2, an Ad Consumer can view the product on a Company
Surface. However, upon clicking the link, Ad Consumers are redirected from
Company’s Surface to Advertiser’s website via in-app browser, on which all
purchasing activity takes place. This includes completing orders, payment
processing, and fulfillment services. The checkout experience is powered
by Advertiser or Advertiser’s Third-Party provider but branded as Company.
While Company branding is located on the checkout platform, it is Advertiser
or the Third-Party provider that processes the order and payments and causes
the payment to be transmitted to Advertiser. Company may provide payment
information and other details that Advertiser or the Third-Party provider uses
to process payment and complete the order. However, Company does not
process any payment.
In this scenario, Company does not process payments or cause payment to
be transmitted to Advertiser, those steps are solely between Advertiser and
Third Parties. Because Company is not a party to Advertiser’s agreements with
the Third-Party, it is not directly or indirectly responsible for collection of the
payment and transmitting it to Advertiser. Any agreement between Advertiser
and Third-Party are outside the purview of Company and Company has no
insight or control of those agreements. The mere fact that the bottom sheet is
Company branded does not indicate that Company is a party to the
transaction at issue with respect to collecting the payment and transmitting it
to Advertiser.
This situation is analogous to Example 1 listed in 86 Ill. Adm. Code 131.130(g).
Like the facts in this example, Company has an online platform. And, like the
platform in the example, Carabibi, Ad Consumers do not make payments,
directly or indirectly, to the Company. Rather, Ad Consumers are sent to the
Advertiser’s, or a Third Party’s, platform that completes the order/checkout
process, processes the payments, and then transmits the payment to the
Advertiser (if needed). Company is not a party to the contracts that
contemplate the order and payment processing on behalf of the Advertiser by
the Third Party. Accordingly, Company does not meet the second prong under

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86 Ill. Adm. Code 131.130(a) from a functional perspective.
ii.

Company does not meet the second prong of the
definition from a legal perspective.

In addition to the above, Company does not meet the definition of a
marketplace facilitator from a legal perspective. It is one of the primary goals
of statutory construction to ascertain and give effect to the intent of the
legislature. 2 The determination as to the intent of the legislature is most
reliably indicated by the language of the statute, which must be given its plain
and ordinary meaning. 3 This principle has long been upheld by the Illinois
Supreme Court on a multitude of occasions and subject matters. 4
Additionally, Illinois courts have held as a general rule that words in a statute
should not be construed as surplusage and should instead attempt to give
meaning to all of the words. 5 Because no definition of “agreement” or
“arrangements” is provided in the statute, it is necessary to look to principles
of statutory construction.
Applying the principles of construction described above, we look to the
definition of the term “agreement” found in Black's Law Dictionary, Ninth
Edition, in ascertaining the plain and ordinary meaning of said term. This
definition states in pertinent part:
Agreement. (1) A mutual understanding between two or more persons
about their respective rights and duties regarding past for future
performances; a manifestation of mutual assent by two or more
persons. (2) The parties’ actual bargain as found in their language or by
implication from other circumstances, including course of dealings,
usage of trade, and course of performance.
In drafting the definition of a “marketplace facilitator,” the Illinois Legislature
included the words “directly or indirectly” through “agreement or
arrangements” to limit the marketplace facilitator rule to parties that
expressly create such agreements or arrangement for the facilitation of the
payments to the seller. In this scenario, Company has done no such thing.
Rather, the Advertiser (i.e., seller) and Third Party have structured such an
agreement excluding the Company from the processing of the transaction and
In re Cnty. Collector, 2022 IL 126929, ¶ 19, 201 N.E.3d 1064, 1068.
Oswald v. Hamer, 2018 IL 122203, ¶ 10, 115 N.E.3d 181, 186–87; Walker v. Bruscato, 2019 IL App (2d) 170775, ¶
34, 134 N.E.3d 971, 980; In re D.F., 208 Ill. 2d 223, 229, 802 N.E.2d 800, 804 (2003); People v. Shinkle, 128 Ill. 2d
480, 486, 539 N.E.2d 1238, 1241 (1989).
4
Id.
5
Valfer v. Evanston Nw. Healthcare, 2015 IL App (1st) 142284, ¶ 22, 31 N.E.3d 883, 888; Bethania Ass'n v. Jackson,
262 Ill.App.3d 773, 777, 200 ill. Dec. 332, 635 N.E.2d 671 (1994).
2
3

COMPANY1/NAME
Page 13
April 28, 2025
facilitating the payments to the Advertiser. Company has no rights or duties
with respect to the transaction and is not a party to any bargain therein. As
such, Company’s involvement in the transaction does not rise to the definition
of an “agreement” or arrangement. Nor could Company be considered to
have directly or indirectly facilitated such agreements because Advertisers
can choose to work with any payment processor of their choosing. Company
does not and cannot limit Advertiser’s choice with respect to who the
Advertiser decides to work with regarding the processing of payments related
to the Advertiser’s sale through its own website.
While there is Company branding located on the bottom sheet that may
provide the Ad Consumer’s details and transmits such detail to Advertiser’s
website, an Ad Consumer must review and confirm such details prior to any
payment processing, Company is not party to any agreement or arrangement
between the Advertiser and payment processor. As such, under the plain and
ordinary meaning of the language in the statue, Company does not meet the
second prong under the definition of a marketplace facilitator because it does
not, directly or indirectly, collect payment from the customer and transmit all
or part of the payment to the seller pursuant to an agreement or arrangement.
To read Company into any such agreement causes the plain language of the
statute to become meaningless and mere surplusage, in opposition of rules
of statutory construction. 6
Company does not directly, or indirectly through agreements or arrangements
with Third Parties, collect payment from the customer and transmit all or part
of the payment to the seller. Accordingly, Company is not a marketplace
facilitator with respect to transactions that occur under Ad Service 2.
3)

Company is not acting as a marketplace facilitator for purposes of
the Ad Service 3 as it does not meet the definition of a marketplace
facilitator under 86 Ill. Adm. Code 131.130(a).

As noted above, a marketplace facilitator in Illinois is defined as a person who,
pursuant to an agreement with an unrelated third-party marketplace seller,
directly or indirectly through one or more affiliates, facilitates a retail sale by
an unrelated third-party marketplace seller by (1) listing or advertising for sale,
by the marketplace seller in a marketplace, tangible personal property that is
subject to tax under the Retailers' Occupation Tax Act; and (2) either directly
or indirectly, through agreements or arrangements with third parties,
collecting payment from the customer and transmitting that payment to the
marketplace seller regardless of whether the marketplace facilitator
receives compensation or other consideration in exchange for its services.
6

Id.

COMPANY1/NAME
Page 14
April 28, 2025
86 Ill. Adm. Code 131.105. Company is not considered a marketplace
facilitator with respect to transactions that occur under Ad Service 3 because
the transactions do not meet the second prong under the definition of a
marketplace facilitator.
a.

Tangible personal property is advertised on Company’s Surface

Under the first prong, Illinois requires a marketplace facilitator to facilitate a
retail sale by an unrelated third-party marketplace seller by listing or
advertising for sale. As stated above, Illinois defines a “marketplace” to mean
a physical or electronic place, forum, platform, application, or other method
by which a marketplace seller sells or offers to sell items. 86 Ill. Adm. Code
131.105.
In this scenario, Company operates Surfaces that allow Advertisers to place
technology enabled ads to advertise products and services for sale to
potential customers (i.e., Ad Consumers). Ad Consumers can interact with an
ad and initiate a variety of activity, both on the Company Surface such as
viewing products and pricing, as well as off the Surface such as creating a cart
and processing payments. As such, Company is merely an advertising service
provider as clarified in 86 Ill. Adm. Code 131.130(a)(2).
b.

Company does not, directly or indirectly, through agreements or
arrangements with third parties, collect payment from the
customer and transmit all or part of the payment to the
marketplace seller under 86 Ill. Adm. Code 131.130(a).

Regardless of whether Company meets the first prong under the definition of
a marketplace facilitator in Illinois, Company does not meet the second prong
with respect to Ad Service 3. The ads that Company produces and displays on
its Surfaces include pictures, sales prices, and an internet link to the
Advertiser’s website; however, the Company takes no further steps to
facilitate a sale. As such, the second prong of the definition of a marketplace
facilitator is not met as discussed in detail below.
i.

Company does not meet the second prong of the
definition from a functional perspective.

Under Ad Service 3, a customer can view the product on a Company Surface
and create a virtual cart on the Company Surface. However, upon selecting
checkout, the cart and the Ad Consumers are sent to a checkout experience
powered by the Advertiser or the Advertiser’s Third-Party provider.
In this scenario, Company does not process payments or cause payment to

COMPANY1/NAME
Page 15
April 28, 2025
be transmitted to Advertiser. Rather, those agreements are solely between
Advertiser and the Third-Party. Because Company is not a party to those
agreements, it is not directly or indirectly responsible for collection of the
payment and transmitting it to Advertiser. Any agreement between Advertiser
and the Third-Party are outside the purview of Company and Company has no
insight or control of those agreements. The mere fact that Company refers
customer interest via a cart does not, in fact, indicate that Company is a party
to the transaction at issue with respect to collecting the payment and
transmitting it to the Advertiser. Further, customers have no obligation to
make a purchase upon passing a cart to Advertiser’s site. Even if a purchase
is ultimately made by the customer, any order details or payment information
supplied by Company at the time the cart is referred to Advertiser must be
reviewed and confirmed by the Ad Consumer. Therefore, not only is the Ad
Consumer not obligated to buy anything, but they are also unable to buy
anything at this point in the transaction flow, which highlights the de minimis
nature of Company’s involvement. As such, Company’s involvement is
minimal and is akin to referring interest in a product.
This scenario is analogous to Example 1 listed in 86 Ill. Adm. Code 131.130(g).
Company has an online platform. However, like the platform in the example,
Carabibi, Ad Consumers do not make payments, directly or indirectly, to the
Company, and Company is not a party to the contracts, agreements or other
arrangements that contemplate the order and payment processing on behalf
of the Advertiser by the Third Party or transmitting such payment to the
Advertiser.
Additionally, Company is not acting in any capacity as a payment processor
under Example 2 listed in 86 Ill. Adm. Code 131.130(g). Unlike the Paymate
example, Company is not processing any payments. Rather, an Advertiser is
separately contracting with a third-party payment processor to process
payments related to the online sale of its products. Company is not a party to
any such agreements or arrangements between the Advertiser and the
payment processor and Advertiser can choose to engage with any payment
processor of its choosing.
Because the Company is not involved in the checkout portion of the
transaction, Company does not meet the second prong under 86 Ill. Adm.
Code 131.130(a) from a functional perspective.
ii.

Company does not meet the second prong of the
definition from a legal perspective.

In addition to the above, Company does not meet the definition of a
marketplace facilitator from a legal perspective. It is one of the primary goals

COMPANY1/NAME
Page 16
April 28, 2025
of statutory construction to ascertain and give effect to the intent of the
legislature. 7 The determination as to the intent of the legislature is most
reliably indicated by the language of the statute, which must be given its plain
and ordinary meaning. 8 This principle has long been upheld by the Illinois
Supreme Court on a multitude of occasions and subject matters. 9
Additionally, Illinois courts have held as a general rule that words in a statute
should not be construed as surplusage and should instead attempt to give
meaning to all of the words. 10 Because no definition of “indirectly”,
“agreement”, or “arrangements” is provided in the statute, it is necessary to
look to principles of statutory construction.
First, we look to the definition of the term “indirect” found in Merriam Webster,
which defines it as “not direct” and includes the following examples in
relevant part:
a (1): deviating from a direct line or course
…
c: not directly aimed at or achieved 11
Company is not, directly or indirectly, collecting payment from the Ad
Consumer and transmitting that payment to the Advertiser. Company is not
deviating from a direct line or course in order for these agreements to be put
into place, nor does Company have an interest in or aim to ensure the
Advertisers in fact make any further sales beyond its own interest in continuing
to place advertisements on its Surface for purposes of ad revenue. Company
merely provides advertising services and a platform on which these ads are
placed. While Company also provides browser technology on which
Advertiser’s website can be viewed, such websites can also be viewed on a
number of other browsers at the Ad Consumer’s discretion. As such, Company
cannot be found to be directly or indirectly collecting payment from the Ad
consumer and transmitting that payment to the Advertiser.
Similarly, applying the principles of construction described above, we look to
the definition of the term “agreement” found in Black’s Law Dictionary,
Ninth Edition, in ascertaining the plain and ordinary meaning of said term.
This definition states in pertinent part:
In re Cnty. Collector, 2022 IL 126929, ¶ 19, 201 N.E.3d 1064, 1068.
Oswald v. Hamer, 2018 IL 122203, ¶ 10, 115 N.E.3d 181, 186–87; Walker v. Bruscato, 2019 IL App (2d) 170775, ¶
34, 134 N.E.3d 971, 980; In re D.F., 208 Ill. 2d 223, 229, 802 N.E.2d 800, 804 (2003); People v. Shinkle, 128 Ill. 2d
480, 486, 539 N.E.2d 1238, 1241 (1989).
9
Id.
10
Valfer v. Evanston Nw. Healthcare, 2015 IL App (1st) 142284, ¶ 22, 31 N.E.3d 883, 888; Bethania Ass'n v. Jackson,
262 Ill.App.3d 773, 777, 200 Ill. Dec. 332, 635 N.E.2d 671 (1994).
11
https://www.merriam-webster.com/dictionary/indirectly.
7
8

COMPANY1/NAME
Page 17
April 28, 2025
Agreement. (1) A mutual understanding between two or more persons
about their respective rights and duties regarding past for future
performances; a manifestation of mutual assent by two or more
persons. 2. The parties’ actual bargain as found in their language or by
implication from other circumstances, including course of dealings,
usage of trade, and course of performance.
Black’s Law Dictionary does not define arrangement, as such we look to the
common definition in Merriam Webster, which defines it as, in relevant part:
(1)
(2)

a: the state of being arranged b: the act of arranging
: something arranged: such as…

c: an informal agreement or settlement especially on personal, social,
or political matters arrangements under the new regime… 12
In drafting the definition of a “marketplace facilitator,” the Illinois Legislature
included the words “directly or indirectly” through “agreements or
arrangements” to limit the marketplace facilitator rule to parties that
expressly create such agreements or arrangement for the facilitation of the
payments to the seller. In this scenario, Company has done no such thing.
Rather, the Advertiser (i.e., seller) and Third Party have structured such an
agreement excluding the Company from the processing of the transaction and
facilitating the payments to the Advertiser. Company has no rights or duties
with respect to the transaction and is not a party to any bargain therein. As
such, Company’s involvement in the transaction does not rise to the definition
of an “agreement” or “arrangement” and Company does not directly or
indirectly facilitate agreements because Advertisers can choose to work with
any payment processor of their choosing. Company does not and cannot limit
Advertiser’s choice with respect to who the Advertiser decides to work with
regarding the processing of payments related to the Advertiser’s sale through
its own website.
Company is not a party to any agreement or arrangement related to payment
processing. It merely provides the technology on which such a transaction
transpires. As such, under the plain and ordinary meaning of the language
in the statue, Company does not meet the second prong under the definition
of a marketplace facilitator because it does not, directly or indirectly, collect
payment from the customer and transmit all or part of the payment to the
marketplace seller pursuant to an agreement. To read Company into any such
agreement causes the plain language of the statute to become meaningless
12

https://www.merriam-webster.com/dictionary/arrangement.

COMPANY1/NAME
Page 18
April 28, 2025
and mere surplusage, in opposition of the rules of statutory construction
discussed above.
Unlike in Example 5, in which Mandameal is providing both a marketplace and
payment processing services, Company is merely providing a marketplace
with respect to Ad Service 3. All payment processing services occur on the
Advertiser’s platform and are specifically contracted for and by the Advertiser.
Company is not a party to those agreements or arrangements, nor does it
control the Advertiser’s choice with respect to which payment processor to
utilize.
As such, Company does not directly, or indirectly through agreements or
arrangements with third parties, collect payment from the customer and
transmit all or part of the payment to the marketplace seller. Thus, Company
is not considered a marketplace facilitator with respect to transactions that
occur with under Ad Service 3.
In summary, Company does not meet the definition of a marketplace facilitator
with respect to Ad Service 1, 2, and 3, and therefore marketplace treatment is
inappropriate with respect to these services.
We respectfully request your review of our request for a GIL. We also request a
call to discuss this request and ensure that you have all the information
needed to provide a determination prior to your issuance of any written
guidance. If you have any questions or need additional information in advance
of the requested call, please contact NAME via email at EMAIL or telephone at
PHONE. Additionally, we respectfully request that any correspondence
regarding this matter be emailed to my attention at EMAIL.
In an email dated April 14, 2025, you provided the following additional information, in
relevant part:

1. Can ad consumers “consolidate” and purchase multiple items from different
   Advertisers (i.e., retailers) in one transaction?
   a. No, it is not possible for an ad consumer to purchase items from
   multiple Advertisers (i.e., retailers) in one transaction because each
   transaction occurs on the retailer’s website, between the buyer and
   the seller. Ad consumers would need to check out separately on each
   of the seller’s sites.
2. Are ad consumers re-directed back to the original site after clicking on an ad?
   a. Yes, if an ad consumer exits from the in-app browser they are redirected back to the original site.

COMPANY1/NAME
Page 19
April 28, 2025
DEPARTMENT’S RESPONSE:
The Retailers’ Occupation Tax Act imposes a tax upon persons engaged in this State in
the business of selling tangible personal property at retail to purchasers for use or
consumption. See 86 Ill. Adm. Cod 130.101. Use Tax is imposed on the privilege of using, in
this State, any kind of tangible personal property that is purchased anywhere at retail from a
retailer. See 86 Ill. Adm. Code 150.101. These taxes comprise what is commonly known as
“sales tax” in Illinois. Purchases of tangible personal property are subject to Illinois sales tax
unless a purchase qualifies for an exemption under Illinois law.
A marketplace is a physical or electronic place, forum, platform, application, or other
method by which a marketplace seller sells or offers to sell items. See 35 ILCS 120/1; 86 Ill.
Adm. Code 131.105.
A marketplace facilitator is a person who, pursuant to an agreement with an unrelated
third-party marketplace seller, directly or indirectly through one or more affiliates facilitates a
retail sale by an unrelated third-party marketplace seller by:
1)

Listing or advertising for sale by the marketplace seller in a marketplace,
tangible personal property that is subject to tax under Retailers’ Occupation Tax
Act; and

2)

Either directly or indirectly, through agreements or arrangements with third
parties, collecting payment from the customer and transmitting that payment
to the marketplace seller regardless of whether the marketplace facilitator
receives compensation or other consideration in exchange for its services. 86
Ill. Adm. Code 131.130(a)(1).

A marketplace seller is a person who makes sales through a marketplace operated by
an unrelated third-party marketplace facilitator and who has obtained a certification from the
marketplace facilitator as provided in Section 131.145. See 35 ILCS 120/1; 86 Ill. Adm. Code
131.105.
Beginning January 1, 2021, a marketplace facilitator, as defined above, is considered a
retailer engaged in the occupation of selling at retail in Illinois for purposes of the Retailers’
Occupation Tax Act if either of following thresholds is met:
1)

The cumulative gross receipts from sales of tangible personal property to
purchasers in Illinois made through the marketplace by the marketplace
facilitator and by marketplace sellers are $100,000 or more; or

2)

The marketplace facilitator and marketplace sellers selling through the
marketplace cumulatively enter into 200 or more separate transactions for the
sale of tangible personal property to purchasers in Illinois. 86 Ill. Adm. Code

COMPANY1/NAME
Page 20
April 28, 2025
131.135(a).
A marketplace facilitator meeting either of these thresholds, is required to register with
the Department, file returns, and remit all applicable State and local retailers’ occupation
taxes administered by the Department for all sales made over the marketplace to Illinois
purchasers, including their own sales and sales made on behalf of marketplace sellers. See
86 Ill. Adm. Code 131.145(a) and 131.145(c). Further, marketplace facilitators are subject to
audit on all such sales.
Generally, a marketplace seller is not liable for State and local retailers’ occupation
taxes for sales of tangible personal property sold to Illinois purchasers through a marketplace.
See 86 Ill. Adm. Code 131.145(b) and 131.150(a). The marketplace facilitator would be liable
for the applicable taxes on these sales unless the marketplace seller provides it with incorrect
information. See 86 Ill. Adm. Code 131.145(d). 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. See 35 ILCS 120/2(h); 86 Ill. Adm. Code
131.145(k); 86 Ill. Adm. Code 131.150(h).
Please note that the rules established under 86 Ill. Adm. Code 131 apply only to the
remittance of State retailers’ occupation tax and local retailers’ occupation taxes
administered by the Department. Marketplace sellers that incur other taxes or fees
administered by the Department, or other taxes not administered by the Department, remain
liable for the remittance of those taxes to the Department or other taxing authority. See 86 Ill.
Adm. Code 131.107(c).
Generally, if a customer is redirected from an advertiser’s platform to a retailer’s
website where payment occurs without any further participation by the advertiser, such
advertiser is not acting as a marketplace facilitator. In situations where a platform provides
advertising only and all payments for tangible personal property are made either directly to the
retailer or to a third-party with whom the retailer has contracted, the advertising platform is
not acting as a marketplace facilitator. Marketplace facilitators must either directly collect
payment from customers and transfer payment to sellers or indirectly, through agreements
the marketplace facilitator has made with third parties, collect payments from customers and
transmit payments to sellers.
I hope this information is helpful. If you require additional information, please visit
our website at https://tax.illinois.gov/ or contact the Department’s Taxpayer Information
Division at 800-732-8866.
Very truly yours,

KAR:slc

Kimberly Rossini
Associate Counsel