Illinois Sales Tax

1/1/2015 – repealed effective 6/28/2019 – re-enacted effective 1/1/2020

7/1/2011 – repealed effective 6/28/2019 – re-enacted effective 1/1/2020

10/1/2018 – see state notice

1/1/2020

Advisory State

563 Sales Tax Jurisdictions

N/A

Origin

The 20th of the month following the reporting period

Illinois Resale Certificate

Product types of exemptions: sales of newspapers and magazines; sales of tangible personal property to interstate carriers for hire used as rolling stock; sales of machinery and equipment that will be used primarily in manufacturing or assembling of tangible personal property for wholesale or retail sale or lease, and production agriculture; qualified sales of building materials

Entity types of exemptions: sales to state, local, and federal governments; sales to not-for-profit organizations that are exclusively charitable, religious, or educational

Illinois Exemption Certificates

Illinois Department of Revenue

Illinois Sales Tax Rate Look-Up

Register for Illinois Sales Tax

• The Illinois retailers’ occupation (sales) tax was enacted June 28, 1933.
• National Bellas Hess Inc. v. Illinois Dept. of Revenue was a 1967 U.S. Supreme Court decision that started paving the way for Internet sales tax and our current debates surrounding South Dakota v. Wayfair, Inc. National Bellas Hess was a mail order company based in Missouri. The company did not own tangible property in Illinois nor have sales outlets, representatives, or solicitors, and did not advertise in Illinois. It mailed catalogs twice a year to customers, occasionally supplemented by flyers. The Illinois Supreme Court determined the company should be required to collect and remit use tax for customers who purchased the company’s goods for use within Illinois. The U.S. Supreme Court held that the U.S. Due Process Clause and Commerce Clause required some physical presence in order for a state to impose a collection responsibility on an out-of-state seller. This ruling was overturned in South Dakota v. Wayfair.

• In Illinois, candy has a broad definition in the way sales tax is imposed. However, candy items that contain flour or require refrigeration are not considered candy. For example, a candy made with flour, such as Twix, is not taxed, but a candy such as a Milky Way would be subject to sales tax.
• While Illinois does not have any home-rule cities; there is continual legislative efforts to allow home-rule style audits.
• Watch purchases from out-of-state sellers; they may have locations in and outside of Illinois. If your transaction is from an out-of-state location, make sure they collect only the 6.25% seller’s use tax v. defaulting to an Illinois ROT rate for their instate location. But if the seller is a true remote seller with no physical nexus, effective 1/1/21 they are required to collect state and local ROT instead of seller’s use tax.