Illinois Sales Tax 2023 - 2024
Illinois sales tax is a consumption tax levied on most goods and services. This primary levy goes directly into the state's coffers to fund a wide range of statewide expenses.
Illinois’ state sales tax is 6.25%, but local rates can make it much higher. Illinois Sales tax rates are determined by exact street address and can vary across jurisdictions. Rates are updated automatically, based on real-time data from local authorities. Almost all services are taxable in the state of Illinois, but the specifics depend on the type of service. For example, repairs and amusement park admissions are taxable, but cleaning services and food delivery are not. It’s important to know which products and services are taxable in your market before you start selling them.
If you have a physical nexus in the state of Illinois, you’re required to collect sales taxes on all taxable goods and services sold in the state. You also need to remit these taxes to the state of Illinois. The State of Illinois is not a member of the Streamlined Sales and Use Tax Agreement, so it’s crucial to understand its sales tax requirements. For 2024, Illinois’ combined state and average local sales tax rate is 8.85%, the highest in the Midwest and seventh-highest in the nation.
How to File Illinois Sales Tax?
When a business sells merchandise subject to sales tax in Illinois, it has an obligation to file and remit the collected tax. The state requires that all retailers register for a sales tax permit, and some types of businesses are required to file Illinois Sales tax on a regular basis. In addition, some businesses are required to collect and remit use tax on the goods and services they provide customers.
Once registered, a business will be assigned a filing frequency: monthly, quarterly, or annually. These are determined by the size and sales volume of the business. Businesses that are large or have significant sales activity are generally asked to file more frequently than smaller businesses. When you’re ready to file, you can begin filling out ST-1, Sales and Use Tax, and E911 Surcharge Return
Illinois Sales Tax Due Dates
To ensure compliance with Illinois sales tax laws, all businesses must file returns and remit collected tax by the state’s assigned due dates. These dates are typically the 20th day of the month following a reporting period. However, if the due date falls on a holiday or weekend, it is automatically moved to the next business day.
Failure to file and remit sales tax on time results in fines and interest charges. Fortunately, businesses can avoid these penalties by following the best practices for filing and paying sales tax in Illinois. This includes retaining the services of a professional bookkeeper or accounting firm that specializes in sales and use tax management. Alternatively, businesses can use a sales tax automation software solution to streamline the process.
