Prairie State Wire

Illinois' online shoppers face a larger checkout bill depending on where the purchase is shipped and the municipality's local sales tax.

Legislation approved in 2019 became active on Jan. 1, 2021, which requires retailers to collect state and local applicable sales taxes. The previous law only mandated a use-tax collected during online transactions.

"You're not just paying the 6.25%, you're paying 8.25% or 7% because they're taking that state 6.25% and they're taking county or other optional-to-enact taxes," Carol Portman, president of the Taxpayers Federation of Illinois, told The Center Square. "If it goes to me in my home in Downers Grove, it's one thing. If it goes to my office in Springfield, it's a different one."

Buyers in Chicago, for example, are now subject to a tax total of 10.25%. Those consumers have to pay the 6.25% state tax in addition to Cook County's 1.75% and the city's 1.25% rate.

Prior to this law, the state had counted on buyers to pay the taxes back, which rarely happened.

Sellers who used online marketplaces to handle their businesses had relied on those providers to collect the proper taxes. The state shifted gears and put the responsibility on the retailers to gather the tax. Those stores with a physical location said it now puts them on an equal playing field with their online counterparts.

"The good news is that, for brick-and-mortar retailers, there's no difference for any of their customers now whether you buy something from an online seller or if you buy it from the brick-and-mortar retailer," Portman said.

The tax-collection law is based on a U.S. Supreme Court decision between Wayfair and South Dakota.