What constitutes doing business in Illinois?

Conducting business in Illinois is considered to be activities that subject an entity to a legal, tax, or compliance obligation in the state. A company is conducting business in Illinois based on physical presence, revenue, and contractual agreements with Illinois residents.

Elements That Make Up Doing Business in Illinois:

1. Physical Presence – A company is likely to be considered doing business in Illinois if it maintains an office, warehouse, storefront, or other facility in the state. Holding or leasing Illinois property can also require the company to register with the Illinois Secretary of State.
2. Employees and Representatives – Employing employees, independent contractors, or sales representatives who are working in Illinois can create a business presence. Businesses with Illinois employees are subject to Illinois labor laws, unemployment insurance requirements, and state withholding tax obligations.
3. Economic Nexus and Taxation – While there is no physical presence, a tax nexus for Illinois may be formed for a company that has over $100,000 in annual revenue or conducts 200 or more unique transactions with Illinois customers. This threshold, which was placed due to Illinois' adherence to the Wayfair ruling, applies primarily to sales tax obligations.
4. Regular Business Transactions – Companies having consistent or sizable business operations within Illinois, selling commodities, providing services, or having business licenses, may become susceptible to state-law registration and adherence.

Businesses considering doing business in Illinois would like to have knowledge regarding legal and taxation liabilities. At One IBC USA provides specialized expertise on registering the company, being compliant, and tax structuring to enable unhindered market entry.