Ultimate Illinois Sales Tax Guide

State taxing authority:	Illinois Department of Revenue
2023 Illinois sales tax rate:	6.25%
Local sales tax rates?	Yes
Streamlined Sales and Use Tax Agreement Member?	No

Do I have to collect Illinois sales tax from customers? 

Retailers who meet these two requirements are required to collect sales tax in Illinois: 

1. Has sales tax nexus in Illinois
2. Sells taxable products or services in Illinois

What creates sales tax nexus in Illinois?

The Illinois Retailers Occupation Tax Act states that “retailers” have nexus in the state. Activities that create nexus include:

• Having a store, office, warehouse or other place of business
• Having employees, contractors, salespeople, installers or other personnel in the state
• Having a 3rd party affiliate in the state OR
• Economic nexus - You have no other nexus in the state, but your gross revenue exceeds $100,000 or you makes more than 200 separate transactions to buyers in the state during the previous 12-month period 

Read more about who needs to collect Retailers Occupation Tax here.

Do I have to collect sales tax from Illinois customers if I sell on Amazon, Walmart, eBay or Etsy?

No. Marketplaces like Walmart and eBay are required to collect sales tax on behalf of 3rd party sellers in Illinois. 

If you have sales tax nexus in Illinois, keep in mind that you are still required to collect sales tax on your other, non-marketplace, Illinois sales.
Learn more about what marketplace facilitator sales tax means for e-commerce sellers here.

Are my products taxable in Illinois? 

Most tangible personal property is subject to sales tax. However, some necessities like food, clothing and medication are not taxable in some states. And sometimes states consider things like digital goods (eBooks, music, movies) and software-as-a-service (SaaS) taxable even though they can’t be touched or held. 

Here’s how Illinois taxes the most commonly sales tax exempt items:

Are groceries taxable in Illinois? 

Yes, but at a reduced state sales tax rate of 1%. Local areas, such as cities and counties, may also apply their sales tax rate to groceries. 

Note: From July 1, 2022 to June 30, 2023 the 1% state sales tax on groceries has been temporarily suspended. 

Is clothing taxable in Illinois? 

Yes, clothing is taxable in Illinois.

Are digital products taxable in Illinois?

No, digital goods are not taxable in Illinois.

Are services taxable in Illinois? 

Services are generally not taxable in Illinois, though if tangible personal property is sold along with a service it may be subject to Illinois’ Service Occupation Tax (SOT).

How to Register for a Illinois Seller's Permit

Register for a Illinois seller's permit online at MyTax Illinois.

Go here to learn how to register for a seller's permit in every US state.

Do I need a Illinois seller's permit if I’m only a wholesaler? 

Yes. In this case, you can apply for a “resale number” with the Illinois Department of Revenue. The department may restrict use of a resale number to a limited time period, such as one year.

Do I need a Illinois seller's permit if I only sell temporarily in the state?

Yes. Illinois requires all retailers to register for a seller's permit and collect sales tax even if only selling in the state temporarily such as at a tradeshow or craft fair. 

Temporary vendors must pay sales tax within ten (10) days of ending their business activity in the state using the Special Event Tax Collection Report and Payment Coupon (IDOR-6-SETR).

Find out more by calling the Illinois Department of Revenue at 1-847-294-4475 or emailing rev.special.events@illinois.gov. 

How to Collect Sales Tax in Illinois

How to Collect Sales Tax on Intrastate Illinois Sales

A sale is considered “intrastate” if the buyer and seller are both located in Illinois, or if the buyer is in Illinois and the item ships from a location (a store, warehouse, etc.) in Illinois. 

Illinois is an “origin-based” sales tax sourcing state. This means that if you make a sale originating in Illinois and the buyer’s ship-to address is also in Illinois you would charge the sales tax rate at the sale’s origination point. 

Example: Your business is located in Naperville, Illinois and you make a sale to a buyer in Rockford, Illinois. You’d charge the buyer the sales tax rate at your Naperville location.

How to Collect Sales Tax on Interstate Illinois Sales

A sale is considered “interstate” if the item ships from outside Illinois and the seller isn’t otherwise “engaged in business” in the state. 

For sales that don’t originate in Illinois, you’d charge the sales tax rate at your buyer’s location. 

Example: Your business is located in Allentown, Pennsylvania but you have nexus in Illinois and you make a sale to a buyer in Champaign, Illinois. You’d charge the buyer the combined state and local Champaign sales tax rate.

Should you collect sales tax on shipping charges in Illinois? 

Yes, shipping charges are subject to sales tax in Illinois.

Learn about sales tax on shipping in every US state here.

How to File and Pay Sales Tax in Illinois

When your sales tax filing due date approaches, you can file Illinois sales tax returns in multiple ways.

1. File and pay online - You can file and pay Illinois sales and use tax online at MyTaxIllinois.
2. File and pay by mail - Fill out Illinois Sales and Use Tax and E911 Surcharge Return (Form ST-1)
3. Let Zamp handle your Illinois sales tax filing and remittance so you never have to look at a sales tax return again! 

Learn how to file and pay sales tax in other US states here.

I didn’t collect any Illinois sales tax this period. Do I still need to file a return?

Yes. File a “zero” return even if you did not collect any sales tax during the taxable period.

What is the penalty for filing and/or paying Illinois sales tax late?

The penalty for failure to file Illinois sales tax is the greater of 2% of the tax due or $250. If the taxpayer receives a notice of non-filing an additional penalty may apply.

The progressive penalty for failure to pay Illinois sales tax is progressive. It includes:

Late Payment Time Period	Illinois Sales Tax Late Payment Penalty
If paid within 30 days	2% of tax due
If paid after 30 days but within 90 days	10% of tax due
If paid after 90 days but within 180 days	15% of tax due
If paid after 180 days	20% of tax due

Can I get an extension on filing my Illinois sales tax return? 

Contact the Illinois Department of Revenue to inquire about extension on time to file and pay sales tax. 

Can I amend an Illinois sales tax return? 

Yes. You can amend an Illinois sales tax return online through MyTaxIllinois or by mail using the Amended Sales and Use Tax Return (Form ST-1-X).

How often will I be required to file and pay sales tax in Illinois? 

The more tax liability you have, the more often you will pay sales tax. Most Illinois sales taxpayers are required to pay either monthly, quarterly or annually by the 20th day of the month following the end of the taxable period.

Any retailer who’s average monthly sales tax liability is $20,000 or more must pay “quarter-monthly payments.” These payments are due on the 7th, 15th, 22nd and last day of the same month.

Illinois sales tax due dates

If a sales tax due date falls on a weekend or holiday it is due the following business day.

Illinois Monthly Sales Tax Filing Due Dates

Taxable Period	Filing Due Date
January 2023	February 21, 2023
February 2023	March 20, 2023
March 2023	April 20, 2023
April 2023	May 22, 2023
May 2023	June 20,2023
June 2023	July 20, 2023
July 2023	August 21, 2023
August 2023	September 20, 2023
September 2023	October 20, 2023
October 2023	November 20, 2023
November 2023	December 20, 2023
December 2023	January 22, 2024

Illinois Quarterly Sales Tax Filing Due Dates

Q1 (Jan-March) 2023	April 20, 2023
Q2 (Apr-June) 2023	July 20, 2023
Q3 (July-Sept) 2023	October 20, 2023
Q4 (Oct-Dec) 2023	January 22, 2024

Illinois Semi-Annual Sales Tax Filing Due Dates

Taxable Period	Filing Due Date
Year 2023	January 22, 2024