Navigating Sales Tax in Illinois

This guide provides an overview of Sales Tax in Illinois, including applicable rates, registration requirements, compliance obligations, and filing deadlines. It is designed for businesses engaging in transactions within Illinois.

Last Updated: May 2025
Group 427320837 e1763784339445

$4

billion in combined sales tax revenue is collected annually in Chicago, more than any other U.S. city.

Illinois at a glance.

State

Illinois

Tax Rate Range

6.25% - 11%

Economic Nexus Threshold

$100,000 in retail sales or 200 separate transactions (Until January 2026)

Filling Deadlines

20th day of the month following the reporting period

Is SaaS Taxable?

Yes

Base Tax Rate:

6.25%

When should your
business collect Sales
Tax in Illinois?

Your business must begin collecting Illinois sales tax as soon as it establishes either physical or economic nexus. Once nexus is established, Illinois requires immediate registration and tax collection beginning with the next taxable sale.

Illinois physical sales tax nexus.

A business establishes physical nexus in Illinois when it maintains any in-state presence or uses representatives to conduct selling activities.

Sales tax physical nexus checklist for Illinois

The following conditions might establish a physical nexus in Illinois:

Which services are taxable in Illinois?

Illinois taxes digital goods and SaaS because they are treated as tangible property or taxable services.

Illinois sales tax information:

Illinois uses destination-based sourcing for remote sales (effective Jan 1, 2025). Apply the 6.25% state rate + all applicable local rates for the customer’s delivery location. Total rates may reach up to 11%.

Illinois taxes tangible personal property, digital goods, SaaS, and any service or product treated as taxable property under Retailers’ Occupation Tax rules.

Register online through MyTax Illinois via the REG-1 process; approval is immediate, though full processing may take 2–4 days, and there is no registration fee. Paper Form REG-1 is also available for manual registration.

Once registered, charge the correct combined state and local rate based on destination sourcing (for remote sellers), include tax on invoices, and remit through MyTax Illinois. Electronic filing is required except in special cases.

Sales Tax return due dates explained.

Illinois assigns filing frequency (monthly, quarterly, or annual) based on prior-year tax liability. All sales tax returns are due on the 20th day of the month following the reporting period. Electronic filing through MyTax Illinois is required except in special cases. Businesses with high liability may also owe estimated prepayments. Amended returns may be filed via the MyTax portal.

FAQs

Shipping is taxable when it is part of the selling price or not separately stated. If separately stated and optional, it is generally exempt.

Yes. Marketplaces must collect and remit tax on behalf of sellers, and marketplace sales are excluded from economic nexus calculations for individual retailers.

Yes. Certain buyers (e.g., nonprofits, resellers) may use exemption certificates. Illinois provides ST-1 forms and an online certificate verification tool to confirm exemption validity.

Related content.

Navigating Sales Tax in Illinois

This guide provides an overview of Sales Tax in Illinois, including applicable rates, registration requirements, compliance obligations, and filing deadlines. It is designed for businesses engaging in transactions within Illinois.

Last Updated: May 2025
Group 427320837 e1763784339445

$4

billion in combined sales tax revenue is collected annually in Chicago, more than any other U.S. city.

Illinois at a glance.

State

Illinois

Tax Rate Range

6.25% - 11%

Economic Nexus Threshold

$100,000 in retail sales or 200 separate transactions (Until January 2026)

Filling Deadlines

20th day of the month following the reporting period

Is SaaS Taxable?

Yes

Base Tax Rate:

6.25%

When should your
business collect Sales
Tax in Illinois?

Your business must begin collecting Illinois sales tax as soon as it establishes either physical or economic nexus. Once nexus is established, Illinois requires immediate registration and tax collection beginning with the next taxable sale.

Illinois physical sales tax nexus.

A business establishes physical nexus in Illinois when it maintains any in-state presence or uses representatives to conduct selling activities.

Sales tax physical nexus checklist for Illinois

The following conditions might establish a physical nexus in Illinois:

Which services are taxable in Illinois?

Illinois taxes digital goods and SaaS because they are treated as tangible property or taxable services.

Illinois sales tax information:

Illinois uses destination-based sourcing for remote sales (effective Jan 1, 2025). Apply the 6.25% state rate + all applicable local rates for the customer’s delivery location. Total rates may reach up to 11%.

Illinois taxes tangible personal property, digital goods, SaaS, and any service or product treated as taxable property under Retailers’ Occupation Tax rules.

Register online through MyTax Illinois via the REG-1 process; approval is immediate, though full processing may take 2–4 days, and there is no registration fee. Paper Form REG-1 is also available for manual registration.

Once registered, charge the correct combined state and local rate based on destination sourcing (for remote sellers), include tax on invoices, and remit through MyTax Illinois. Electronic filing is required except in special cases.

Sales Tax return due dates explained.

Illinois assigns filing frequency (monthly, quarterly, or annual) based on prior-year tax liability. All sales tax returns are due on the 20th day of the month following the reporting period. Electronic filing through MyTax Illinois is required except in special cases. Businesses with high liability may also owe estimated prepayments. Amended returns may be filed via the MyTax portal.

FAQs

Shipping is taxable when it is part of the selling price or not separately stated. If separately stated and optional, it is generally exempt.

Yes. Marketplaces must collect and remit tax on behalf of sellers, and marketplace sales are excluded from economic nexus calculations for individual retailers.

Yes. Certain buyers (e.g., nonprofits, resellers) may use exemption certificates. Illinois provides ST-1 forms and an online certificate verification tool to confirm exemption validity.

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