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What are drop shipments and how are they taxed?

Answer #152 -- ( Published 08/09/2005 12:38 PM | Updated 07/12/2017 10:39 AM )

What are drop shipments and how are they taxed?

A drop-shipment situation is one in which an out-of-state purchaser makes a purchase for resale from an Illinois company and has that Illinois company deliver (drop ship) the property to an Illinois location. In this example, the Illinois company is required to either collect tax or document a valid exemption. See Illinois Administrative Code, Title 86, Section 130.225.

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