Illinois Proposes Trade-Show Sales Tax Nexus Law

Illinois has proposed a new law for establishing a taxable presence (nexus) when remote retailers attend a trade-show in Illinois.

This rule adds a new section to the Use Tax regulations providing that the presence of an out-of-State retailer or its representative in Illinois for the purpose of engaging in trade show activities establishes nexus for the retailer and requires collection of Use Tax on all sales into Illinois.

The rule, however, creates a "safe harbor" for retailers at trade shows. Provided that a retailer meets 3 conditions, the retailer's presence at a trade show will not trigger collection of Use Tax on sales into Illinois. The 3 conditions are:

  1. that the retailer attends no more than 2 trade shows per calendar year;
  2. is physically present at those 2 trade shows for an aggregate total of no more than 8 days during any calendar year; and
  3. combined gross receipts from sales made at the 2 trade shows during any single calendar year do not exceed $10,000.

The rule describes the types of activities that count toward the 8-day physical presence limitation; sets out how a "day" is calculated; and provides additional information to assist retailers in determining whether their activities fall within the safe harbor created by the rule.

The rule specifies that any sales made in Illinois during the trade show are subject to Retailers' Occupation Tax Act and applicable local taxes.

The rule defines "trade show activities," and provides examples of trade shows that are included within or excluded from the scope of the regulation.


Everybody loves a 'safe harbor' rule because it provides certainty. The problem with a 'safe harbor' rule is that they seem unconstitutional or at the very least, arbitrary. For example, why are 2 trade shows okay, but not 3? Why are 8 days okay, but not 9? Why are $10,000 in sales okay, but not $11,000?

Not a fan.