Is a single-seller e-commerce platform (like a photographer's order and payment site) a 'marketplace facilitator' that must collect Illinois sales tax on behalf of its business customers?

Plain-English summary

A company that runs an order-management website for independent photographers (mainly school and sports photographers) asked the Illinois Department of Revenue whether its platform makes it a "marketplace facilitator" -- a status that, if it applies, would make the platform responsible for collecting and remitting Illinois sales tax on its customers' behalf.

On the platform, parents view and order photos of their own child through a photographer-specific website, reachable only through a unique URL, customer code, or QR code tied to that one photographer. Parents cannot search or browse for other photographers or other children's photos, and each photographer sets his or her own products, pricing, coupons, and discounts. The company was also building a next-generation version with more automation (payment processing, order fulfillment, communications), but with the same core limits: no multi-vendor marketplace, no photographer search, and a single URL tied to a single business.

The Department explained that a "marketplace" under Illinois law connects multiple, unrelated third-party sellers with buyers -- that's what distinguishes a marketplace from an ordinary e-commerce storefront, which typically has just one seller. While a platform hosting multiple sellers is normally treated as a marketplace, the Department said an exception can apply based on the specific facts, looking at things like whether a vendor's page functions and is perceived as its own standalone website, whether it has its own URL, whether it sells something a customer can't find through a normal marketplace product search (like a specific family's own school photos), and whether the platform actually lets multiple sellers sell to the same customer. Applying that framework, the Department reiterated its general rule: if a customer is directed to a specific seller's page from a code or link for that seller, and the platform doesn't let the customer search or browse for other sellers' products, the platform is not acting as a marketplace facilitator -- regardless of how many separate photographer-businesses use the underlying software.

The Department did not, however, give the company a definitive yes/no answer on its own specific platforms (current or future) -- as is typical for a GIL, it restated the general legal test and left the taxpayer to apply it to its own facts, and it also did not address the company's follow-up questions about whether individual photographers could keep self-remitting tax versus letting the platform handle it, or about upcoming regulatory changes.

What this means for you

Software and platform developers serving single-business sellers

If your platform's design keeps each seller's customers walled off in their own storefront -- reachable only via that seller's own link, code, or subdomain, with no way to search or browse other sellers on the same platform -- you have a strong argument you are not a "marketplace facilitator" even if you host many separate seller accounts and even if you process payments or handle fulfillment for them. The Department looks at whether the platform functions and is perceived as each seller's own website, not merely at how many sellers use your software.

Photographers and similar small-business sellers using order-management platforms

If your order platform meets this single-seller test, you (not the platform) generally remain responsible for collecting and remitting your own Illinois sales tax, unless and until the platform crosses into marketplace-facilitator territory (for example, by adding cross-seller search or browsing). Confirm with your platform provider how it is structured and whether that could change under a redesigned or "next generation" version of the product.

Business owners and accountants evaluating a platform's marketplace status

Don't assume that adding payment processing or order fulfillment automatically makes a platform a marketplace facilitator -- those are relevant to the facilitator test in 86 Ill. Adm. Code 131.130(a)(1), but the threshold question is whether the platform is a "marketplace" at all under 86 Ill. Adm. Code 131.105, which turns on whether multiple unrelated sellers can be found and compared by the same customer. A single-seller, code/link-based storefront generally fails that threshold regardless of what other services the platform bundles in.

Anyone building a multi-tenant platform that might later add cross-seller shopping

This ruling only covers the facts described -- a platform where customers cannot shop across sellers. If a future product update lets customers browse or search across multiple sellers' offerings (the company's "future product" description stopped short of this), the analysis could well flip, and the Department's economic-nexus thresholds ($100,000 in Illinois sales, or 200 separate transactions, cumulatively across the facilitator and its sellers) would then need to be tracked.

Common questions

Q: Does a platform become a "marketplace facilitator" just because it processes payments for a seller?
A: Not by itself. Payment processing (including "functionality for connection to a payment mechanism") is one of the two elements of the marketplace-facilitator definition, but the platform first has to be a "marketplace" -- meaning it lets a customer choose among multiple, unrelated third-party sellers. A single-seller platform reached only via that seller's own link or code isn't a marketplace at all, so the payment-processing element never comes into play.

Q: What's the difference between a "marketplace" and an ordinary e-commerce store, according to the Department?
A: A marketplace connects multiple, unrelated third-party sellers with buyers who can shop among them. An e-commerce store typically has a single seller. The Department said a platform hosting multiple sellers' storefronts can still avoid marketplace status in some cases, based on facts like whether each seller's page functions as its own standalone website, has its own URL, and doesn't let customers search or browse for other sellers' products.

Q: If a platform IS a marketplace facilitator, when does it have to register and collect Illinois tax?
A: Beginning January 1, 2021, a marketplace facilitator must register, file returns, and remit state and local Retailers' Occupation Tax once either of two thresholds is met (cumulatively, across the facilitator and its marketplace sellers): $100,000 or more in gross receipts from Illinois sales, or 200 or more separate transactions with Illinois purchasers. Below both thresholds, the facilitator is not treated as a retailer for those sales, and each marketplace seller must remit its own tax.

Q: Can both the marketplace facilitator and the individual seller be taxed on the same sale?
A: No. The Department is prohibited from collecting Illinois state and local Retailers' Occupation Tax from both the marketplace facilitator and the marketplace seller on the same transaction. If a qualifying marketplace facilitator is responsible for a sale, the marketplace seller generally is not liable for that sale's tax (unless the seller gave the facilitator incorrect information).

Q: Did the Department directly answer whether this company's current and future platforms are marketplace facilitators?
A: Not definitively. As a General Information Letter, the response restated the general legal framework and the Department's general single-seller/link-based rule, rather than issuing a binding, fact-specific determination the way a Private Letter Ruling would. The company would need to seek a PLR (under 2 Ill. Adm. Code 1200.110) for a binding answer tailored to its exact facts.

Citations and references

Regulations:

• 86 Ill. Adm. Code 131.105 (definitions of "marketplace" and "marketplace seller")
• 86 Ill. Adm. Code 131.130(a)(1) (definition of "marketplace facilitator"; payment-mechanism functionality)
• 86 Ill. Adm. Code 131.135(a) (economic nexus thresholds: $100,000 in sales or 200 transactions)
• 86 Ill. Adm. Code 131.145(a), (b), (c), (d), (l) (marketplace facilitator registration, certification, and liability)
• 86 Ill. Adm. Code 131.150(a), (h) (marketplace seller liability; no double collection)
• 86 Ill. Adm. Code 130.101 (Retailers' Occupation Tax imposition)
• 86 Ill. Adm. Code 150.101 (Use Tax imposition)
• 86 Ill. Adm. Code 130.501(a), (b) (sales tax return filing deadlines)
• 86 Ill. Adm. Code 130.525 (signature requirements for corporate returns)

Statutes:

• 35 ILCS 120/1 (Retailers' Occupation Tax Act, general)
• 35 ILCS 120/2(c) (marketplace facilitator treated as retailer once thresholds are met)

Procedural rules:

• 2 Ill. Adm. Code 1200.110 (Private Letter Ruling procedures)
• 2 Ill. Adm. Code 1200.120 (General Information Letter procedures)

Source

• Landing page: Illinois 2025 Sales Tax Letter Rulings
• Original PDF: ST25-0032-GIL.pdf

Original ruling text

ST 25-0032-GIL 05/28/2025 MARKETPLACE FACILITATORS
Generally, if a customer is directed to a seller’s website on a platform from a code
or link for that seller and the platform does not allow a customer to search or
browse for other sellers for the same or different product, the platform is not acting
as a marketplace facilitator. 86 Ill. Adm. Code 131.130. (This is a GIL).
May 28, 2025
NAME
COMPANY1
ADDRESS
Dear NAME:
This letter is in response to your letter dated February 5, 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:
I am requesting a general information letter ruling pursuant to 2 Illinois
Administrative Code 1200.120 on behalf of a client of mine. The Client would
like to know if Illinois considers it to be a marketplace facilitator under Ill.
Admin. Code 131.130(a)(1).
Background - the Company’s current product:
We have a client (the “Company”) that started 15 years ago as an online tool
for local, independent photography studio businesses (the “photographers”)
to convert paper order forms from customers to electronic versions of those
forms for the photographer’s own business. This helped photographers
digitize their paper order taking. The Company’s customers are the

COMPANY1/NAME
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May 28, 2025
photographers. Then and now, the photographers’ primary customers are
parents purchasing school or sports photos of their children.
The Company then added the ability for parents to view images of their child
and choose their favorite images online through an individual photographercentric website (the “Website”). As a result, parents can now choose a
particular print package they want to purchase from the photographer.
Photographer chooses what products to offer and sets pricing, coupons, and
discounts for all products. The Company offered the ability for the
photographers to add secure credit card information to the checkout section
of the Website to improve the workflow and security for recurring customers.
Over time, the Company has added tools to the Website for photographers to
be able to setup email and text for automatic communications, based on
customer actions. This is the current product offering of the Company to its
photographer customers. Parents can only view images of their child and
cannot “shop around” or view any products for other children or purchase
products from other photographers.
For 90% of all orders, online consumer orders are communicated via the
Website to the photographers, who receive payment for the orders. The
photographers then decide if they will print the photos in house or if they will
submit the product orders to a wholesale company to fulfill. The
photographers determine their own sales tax liability, collect, and remit
appropriate sales tax. Each photographer’s customer base through the
Website is largely his/her own geographical footprint, as he/she is the one
physically taking the pictures on site for schools and sports clubs.
For the remaining 10% of orders, the Company sets up simple a la carte
products that can be automatically fulfilled for the photographers to their
clients. An example of this is a single 8x10 print, a button, or a pre-defined
package of 2-5 photo prints from an image.
Again, parents can only view images of their child and cannot “shop around”
or view any products for purchase for other photographers, or of other
children from another event. The Website has specific parameters so
individual customers can only view specific products related to their child
through a unique URL, customer code, or QR code.
The Company’s future product:
The Company’s customers (the photographers) want to reduce the handling
for their photography orders. Therefore, the photographers are asking the

COMPANY1/NAME
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May 28, 2025
Company to expand the tools for automation, payment processing, record
keeping automated communication, and order fulfillment. Because the
Company’s current platform doesn’t have the infrastructure to accomplish
everything they are requesting, it is in the process of building its next
generation of photographer e-commerce platform.
The features of this new cloud platform build on the existing platform and
include the following:
•

Ability for the photographer to setup his/her own sub domain and
unique branding of web pages. The Company is successful if the
photographer’s customers don’t know the Company’s platform existsinstead, each consumer perceives the platform as the photographer’s
own website.

•

Photographer chooses from 5-7 pre-defined sales experiences for their
clients.

•

Photographer configures the products he/she wishes to sell into price
lists.

•

Photographer sets up a sub domain to his/her unique URL for each
organization he/she is photographing giving that organization a
common place to go for the different events being photographed
throughout the year.

•

Photographer sets pricing, coupons and discounts.

•

Platform provides tools for photographer to charge the consumer and
receive that money in his/her bank account.

•

Photographer chooses from some recommended communication
messages and profiles and customizes those messages to help reduce
customer service calls to his/her small business.

•

Ability for the photographer to configure the different packages and
products he/she sells and tell the platform which elements are
photography services, which are digital images, and which are physical
products, so the appropriate state sales tax rules can be applied.

COMPANY1/NAME
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May 28, 2025
•

The photographer can choose which orders and products he/she
wishes to fulfill after going back to the studio for additional artworks
and which orders and products will be automatically fulfilled.

•

Tools for the photographer’s customer service employee to log in view
orders, and send messages to clients.

•

Reports to help the photographer see sales trends and automated
communication responses, which will help him/her make informed
decisions to improve customer service and sales.

•

The Company charges a subscription fee and a commission on sales
to pay for the cloud platform of tools.

The platform does not and will not, allow:
•

Multivendor marketplace where multiple vendors can sell to one
customer.

•

Photographer search - the photographer must provide clients his
unique URL.

•

Consumers to shop across a marketplace of sellers. A single URL
exists for a single business.

Questions:
•

Is the Company’s current website considered a marketplace for
marketplace facilitator sales tax purposes pursuant to Ill. Admin. Code
131.130(a)(1)?

•

Is the Company’s new platform considered a marketplace for
marketplace facilitator sales tax purposes pursuant to Ill. Admin Code
131.130(a)(1)?

•

We believe some photographers will prefer to continue to collect and
remit sales tax, while others will prefer to have the Company manage
this complexity for them. Under current law, can the Company provide
both options for them?

•

Have there been any changes in statutes or regulations, or can we
expect upcoming guidance or clarification of the Department’s

COMPANY1/NAME
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May 28, 2025
position on marketplace facilitators that would change how a platform
like this is viewed so the Company can build it with those requirements
in mind?
I appreciate your attention to this matter. Please feel free to contact me at
EMAIL or PHONE with any questions.
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. Code 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.
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 86 Ill. Adm. Code
131.105. A marketplace seller is a person that makes sales through a marketplace operated
by an unrelated third-party marketplace facilitator. Id. 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). Provision on a marketplace of functionality for
connection to a payment mechanism meets these requirements. 86 Ill. Adm.
Code 131.130(a)(1)(B).

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:

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May 28, 2025
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 131.135(a).

A marketplace facilitator meeting both 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).
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 86 Ill. Adm.
Code 131.145(l) and 131.150(h).
The Department has encountered various marketing and payment arrangements
used by ecommerce businesses. Notably, the broad language of the statute and
administrative rules discussing marketplace facilitators allows for its application to a wide
variety of ecommerce businesses. See 35 ILCS 120/1; 86 Ill. Adm. Code 131.105.
A marketplace connects multiple third-party sellers with buyers. The multiple seller
model is a key difference between an online marketplace and a traditional ecommerce
online store. An ecommerce store typically has a single seller. In contrast, a marketplace
connects multiple, unrelated third-party sellers with buyers. While it is possible that a
platform which hosts multiple sellers would not be considered a “marketplace” for
purposes of meeting the requirements under 86 Ill. Adm. Code 131.105 and 131.130, such
instance would be an exception to the general rule and would be based on the specific facts
of each case. Some considerations could include whether: 1) a vendor’s setup on the
platform functions as its own online store or website and is perceived as such by the public;
2) a vendor will have its own URL; 3) a vendor sells a unique product that could not be found
in a normal product search through the marketplace (e.g. customers are parents purchasing
school photos of their children); and 4) the platform does not function as a traditional
multiple seller marketplace (e.g. the platform does not allow multiple sellers to sell to a

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May 28, 2025
customer). Generally, if a customer is directed to a platform from a code or link for a
specified seller and the platform does not allow a customer to search or browse for other
sellers for the same or different product, the platform is not acting as a marketplace
facilitator.
As to the tax filing requirement, effective January 1, 2021, a marketplace facilitator
that meets either of the thresholds in 86 Ill. Adm. Code 131.135(a) is considered a retailer
engaged in the occupation of selling at retail in Illinois and is liable for all applicable State
and local retailers’ occupation taxes administered by the Department on all sales to Illinois
purchasers made over the marketplace on behalf of marketplace sellers. See 35 ILCS
120/2(c). Marketplace sellers may not elect to collect and remit tax liability for their own
sales made over a marketplace facilitated by a qualifying marketplace facilitator. Further, if
a marketplace facilitator does not meet a threshold, it is not considered a retailer for sales
taking place over its marketplace. Marketplace sellers must remit tax on their own behalf
and file returns with the Department when selling over a marketplace that has not met a
threshold.
Additionally, a marketplace facilitator is required to certify to each marketplace
seller that:
1)

It assumes the rights and duties of a retailer under the Retailers’ Occupation
Tax Act regarding sales made by the marketplace seller through the
marketplace; and

2)

It will remit all applicable State and local retailers’ occupation taxes
administered by the Department for sales made through the marketplace. 86
Ill. Adm. Code 131.145(b).

Generally, depending upon a retailer’s average monthly sales tax liability, on or
before the twentieth day of each calendar month, every person engaged in the business of
selling tangible personal property at retail in this State during the preceding calendar month
shall file a return with the Department for the preceding month. See 86 Ill. Adm. Code
130.501(a). For further information on sales tax return requirements, see 86 Ill. Adm. Code
130.501(a) and (b). Returns must be signed by the president, vice president, secretary or
treasurer, or by the properly accredited agent whose power of attorney is on file with the
Department, if the seller is a corporation. See 86 Ill. Adm. Code 130.525.
If a retailer chooses to have a third-party file its return, the Department’s website
includes a list of vendors who are approved by the Department to electronically file sales
and use tax returns. Software vendors will be approved after they register and have their
product approved through testing. These companies may be web-based companies or

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traditional software development companies who produce a product that formats and
transmits electronic returns.
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,
Thomas Grudichak
Associate Counsel
TG:slc