Illinois DOR Clarifies Corporate Income Tax Nexus for Software Licensing

The Illinois Department of Revenue (DOR) issued a general information letter addressing nexus concerns for a company based outside Illinois, licensing proprietary software and providing related equipment to Illinois customers. The Department stated that nexus determinations are highly fact-specific and cannot be made through letter rulings, which require an audit. The letter provides general information on nexus standards and rules for sourcing income from sales of services and intangibles under the Illinois Income Tax Act. [Il. Dep’t of Revenue, IT-25-0007-GIL, 08/15/25]

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