Illinois Sales Tax Changes for Certain DTC Licensees

Beginning Jan. 1, 2021, winery shipper licensees that do not have a physical presence in Illinois and meet either of the Wayfair tax remittance thresholds are required to collect and remit all state and local imposed sales taxes, also known as Retailers’ Occupation Tax (ROT), on sales shipped to Illinois consumers at the destination rate under the Leveling the Playing Field for Illinois Retail Act.

The Wayfair tax remittance thresholds for remote sellers, including winery shipper licensees, are $100,000 or more annual gross receipts from sales delivered into Illinois; or 200 or more separate transactions for the sale of tangible personal property to purchasers in Illinois during the preceding calendar year.

The Illinois Department of Revenue has provided specific guidance to help winery shipper licensees determine if they meet or exceed the tax remittance thresholds and will be required to register for Retailers’ Occupation Tax. Wineries subject to Retailers’ Occupation Tax will need to update their registration with the Illinois Department of Revenue.

Currently, out-of-state winery shipper’s license holders are only required to remit the 6.25% Illinois state use tax. Affected wineries may use the Department’s Tax Rate Finder to look up location specific tax rates.

Wineries that have a physical presence in the state or that are under the tax remittance thresholds are not affected by these changes and should continue to remit the 6.25% state use tax on all sales.

More information about the requirements for shipping wine to Illinois consumers is available on the Illinois DTC page of Wine Institute’s website.