Illinois consults on targeted-advertising tax rules

Consultation, not final regulation

The notice says the draft has neither been filed with the Secretary of State nor submitted to the Joint Committee on Administrative Rules. Proposed Part 496 implements the Targeted Advertising Services Tax Act, 35 ILCS 190, enacted through Public Act 104-0468. The consultation does not itself create the tax or make the proposed administrative interpretations operative.^[1][2][3]

The enacted framework

Section 1-15 imposes a 10% tax from 1 January 2027 on providers’ gross receipts from targeted advertising services provided in Illinois. The statutory definition covers programmatic advertising using personal information about its audience. It excludes advertising on interfaces owned or operated by or for a qualifying news-media entity; an aggregator or republisher is not automatically such an entity.^[3]

The provider threshold is more than USD 1 million of Illinois targeted-advertising receipts over the previous 12 months. Providers test it quarterly, with a one-year remittance and return obligation once the threshold is met and a continuation test thereafter. Controlled-group corporations are treated as one entity for this threshold. The statute also preserves federal-law limitations and specified federal-government and exempt-advertiser exclusions.^[3]

Audience records and compliance

Under section 1-20, sourcing depends on the user-consumer’s location. Providers use the contact information in their possession or control. An Illinois address, IP address or relevant place-of-primary-use information creates a rebuttable Illinois-location presumption, with the provider bearing the burden of rebuttal. Section 1-25 requires registration from 1 January 2027; section 1-35 provides monthly returns and payment by the 20th for the preceding month.^[3]

For multinational advertising groups, the immediate task is to map publishing roles, Illinois audience evidence and group receipts, and compare proposed Part 496 examples with actual contracts and systems. The draft adds administrative interpretations, including publisher and intermediary treatment; these remain proposed. Keep the 30 November comment deadline separate from the enacted compliance timetable and monitor formal rulemaking before treating the draft as final.^[1][2][3]