Regarding nexus in Illinois: If a customer sends material to a processor for additional work and leaves it there for a short period of time until it can be delivered to a customer, does this create nexus? We think it does; our customer does not.

According to the Illinois Department of Revenue, whether nexus is created under the scenario you described depends on where the final customer resides.

If the processor stores the reworked material as inventory in Illinois and it is sold to a customer who resides in Illinois, nexus is created and tax must be assessed.

However, if the material is reprocessed, placed in inventory and sold to a customer who does not live in Illinois, nexus is not created. But, the state recommends obtaining a temporary storage permit for the reworked material if the product will not be sold or delivered in Illinois.

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