Illinois just made a major change to its sales tax nexus rules, and many businesses don’t realize how much this impacts them.
Starting in 2026, Illinois removed its 200 transaction threshold, leaving only a $100,000 sales threshold to determine economic nexus.
If you sell into Illinois, this change could affect whether you’re required to collect and remit sales tax.
Here’s what changed, and what your business needs to do next.
Illinois simplified its economic nexus rules by removing the transaction-based threshold.
Before 2026, businesses had nexus in Illinois if they had:
Now, only one rule applies:
If your business exceeds $100,000 in sales into Illinois, you have economic nexus.
The number of transactions no longer matters.
This update may seem simple, but it has a big impact depending on how your business operates.
Businesses that previously exceeded 200 transactions but didn’t reach $100,000 in sales may no longer have nexus in Illinois.
This can reduce compliance requirements for certain eCommerce businesses.
If you sell high-value products or services, you may still reach the $100,000 threshold quickly, even with fewer transactions.
For these businesses, the change does not reduce compliance obligations.
While removing the transaction threshold simplifies the rule, businesses still need to carefully track revenue by state.
Monitoring when you cross the $100,000 threshold is critical to staying compliant.
Economic nexus is a rule that requires businesses to collect sales tax in a state based on their sales activity, even if they don’t have a physical presence there.
This concept became standard after the 2018 Supreme Court decision in South Dakota v. Wayfair.
Today, nearly every state uses economic nexus thresholds to determine tax obligations for remote sellers.
If you sell into Illinois, it’s important to review your sales activity under the updated rules.
Start by:
Even if this change reduces your obligations, it’s important to confirm your status and avoid potential compliance issues.
Illinois’ decision to remove the transaction threshold is part of a broader trend toward simplifying sales tax rules.
However, for businesses operating across multiple states, sales tax compliance is still complex and constantly evolving.
Understanding where you have nexus is the first step to staying compliant.
Keeping up with changing nexus rules across multiple states can get complicated fast.
At sales.tax, we help businesses understand where they have nexus, stay compliant, and avoid costly mistakes.
Schedule a free consultation today and make sure your business is covered.