Which state has the lower sales tax nexus threshold, Texas or Illinois?

Illinois has the lower economic nexus threshold at $100,000, versus $500,000 in Texas. A seller's Illinois sales would reach the published Illinois threshold first. These are the thresholds published by each state's tax authority as of 2026-05-25; confirm against the official source before registering.

Do both Texas and Illinois have marketplace facilitator laws?

Yes. Both Texas and Illinois have marketplace facilitator laws, so marketplaces such as Amazon, Etsy, and eBay collect and remit sales tax on the sales they facilitate in both states. Direct-to-consumer sales you make outside a marketplace remain your own responsibility once you cross each state's threshold. Verified 2026-05-25.

Which has the lower sales tax rate, Texas or Illinois?

Texas has the lower combined state and local sales tax rate at 8.19%, compared with 8.96% in Illinois. These are the statewide base rate plus the average local rate; the exact rate depends on the customer's delivery address. As of 2026-05-25.

Do I need to register for sales tax in both Texas and Illinois?

It depends on where you cross each state's economic nexus threshold (or have physical presence there). Texas's published threshold is $500,000, and Illinois's is $100,000. You generally register in a state only once you cross its threshold, so you may have an obligation in one, both, or neither. Run the nexus calculator with your actual sales and confirm with each state's official source. Thresholds as of 2026-05-25.

When did economic nexus take effect in Texas and Illinois?

Texas's economic nexus rule took effect on 2019-10-01, and Illinois's took effect on 2026-01-01. Both stem from the 2018 South Dakota v. Wayfair Supreme Court decision, which let states require remote sellers to collect once an economic threshold is met.

Texas vs Illinois Sales Tax: 8.19% vs 8.96%, Nexus 2026

Updated 2026-06-26

Reviewed by Nexus by State research team using official state tax sources. Last reviewed 2026-06-26.

Compare Texas and Illinois sales tax rates: Texas shows a 8.19% combined state and average local rate with a $500,000 economic nexus threshold, while Illinois shows 8.96% with a $100,000 threshold. This guide focuses on seller sales-tax obligations rather than personal income-tax returns.

Metric	Texas	Illinois
Economic nexus threshold	$500,000	$100,000
Transaction threshold	None	None
State rate	6.25%	6.25%
Avg. local rate	1.94%	2.71%
Combined state + local	8.19%	8.96%
Marketplace facilitator	Yes	Yes
Effective since	2019-10-01	2026-01-01

Which state is easier for sellers?

For low-revenue sellers: nexus triggers first in Illinois because of its $100,000 threshold. If you cross that first, you register there first.

On rate: Texas is friendlier for customers with a combined state + local rate of 8.19% vs 8.96%.

Neither state has a transaction-count trigger — only the dollar threshold matters.

Texas — nexus note

Texas sales tax nexus and SaaS taxability: economic nexus applies to remote sellers with $500,000 or more in total Texas revenue during the preceding twelve calendar months. After crossing that safe harbor, Texas requires a permit and sales/use tax collection no later than the first day of the fourth month after the threshold-crossing month. Texas treats data processing as a taxable service and the Comptroller says data processing providers include software-as-a-service sellers and application service providers; 20% of a data-processing charge is exempt, so SaaS treated as data processing is generally taxed on 80% of the invoice amount. Marketplace-only sellers whose marketplace provider certifies Texas collection generally do not need a Texas tax permit, but sellers must keep marketplace-sales records for at least four years.

Illinois — nexus note

Illinois sales tax nexus and economic nexus threshold: beginning January 1, 2026, a remote retailer is subject to Illinois state and local Retailers' Occupation Tax when it has $100,000 or more in cumulative gross receipts from sales of tangible personal property to Illinois purchasers during the lookback period. The prior 200-transaction threshold applied from 2021 through 2025 but no longer applies for 2026 and later periods. Remote retailers and marketplace facilitators determine the threshold quarterly for the preceding 12-month period, and destination-based local ROT generally applies when the sale is sourced outside Illinois.

What to do next

Use the nexus calculator to check exactly which of Texas and Illinois you've already triggered. Then read each state's full guide:

Texas overview →Illinois overview →

Frequently asked questions

Which state has the lower sales tax nexus threshold, Texas or Illinois?: Illinois has the lower economic nexus threshold at $100,000, versus $500,000 in Texas. A seller's Illinois sales would reach the published Illinois threshold first. These are the thresholds published by each state's tax authority as of 2026-05-25; confirm against the official source before registering.
Do both Texas and Illinois have marketplace facilitator laws?: Yes. Both Texas and Illinois have marketplace facilitator laws, so marketplaces such as Amazon, Etsy, and eBay collect and remit sales tax on the sales they facilitate in both states. Direct-to-consumer sales you make outside a marketplace remain your own responsibility once you cross each state's threshold. Verified 2026-05-25.
Which has the lower sales tax rate, Texas or Illinois?: Texas has the lower combined state and local sales tax rate at 8.19%, compared with 8.96% in Illinois. These are the statewide base rate plus the average local rate; the exact rate depends on the customer's delivery address. As of 2026-05-25.
Do I need to register for sales tax in both Texas and Illinois?: It depends on where you cross each state's economic nexus threshold (or have physical presence there). Texas's published threshold is $500,000, and Illinois's is $100,000. You generally register in a state only once you cross its threshold, so you may have an obligation in one, both, or neither. Run the nexus calculator with your actual sales and confirm with each state's official source. Thresholds as of 2026-05-25.
When did economic nexus take effect in Texas and Illinois?: Texas's economic nexus rule took effect on 2019-10-01, and Illinois's took effect on 2026-01-01. Both stem from the 2018 South Dakota v. Wayfair Supreme Court decision, which let states require remote sellers to collect once an economic threshold is met.

More sales tax comparisons

Selling into more than two states? Compare Texas and Illinois against other major markets for nexus thresholds, rates, and marketplace facilitator rules.

More Texas comparisons

More Illinois comparisons

Sources

date_retrieved: Texas 2026-05-25 · Illinois 2026-05-22