Illinois has enacted sales and use tax legislation that creates new requirements for direct pay permit holders. By March 31, 2025, and by March 31 of each year thereafter, direct pay permit holders must review their purchase activity to verify that purchases made during the 12-month period ending on December 31 of the preceding calendar year were sourced correctly and that the correct tax rate was applied.
If the direct pay permit holder discovers an error in sourcing or the tax rate during the review, they should file an amended return to correct the error by April 20 of the calendar year in which the review occurs.
If a direct pay permit holder fails to properly verify purchase activity and correct any sourcing and tax rate errors, they are liable to pay a penalty of $6,000 to the Department of Revenue (DOR). However, the penalty will not be imposed if the DOR finds that at least 95% of the direct pay permit holder’s transactions for the 12-month review period are correctly sourced and the correct taxes have been remitted or the permit holder acted with ordinary business care and prudence. (P.A. 103-966 (S.B. 3282), Laws 2024)