Illinois State Sales Tax- A Quick Guide for Businesses

The State Spotlight Series

Illinois state scenery, Chicago

Illinois state sales tax rate is 6.25%. However, always remember that is the state rate. It does not include any local jurisdictions and can be as high as 11% in some places in Illinois.

Illinois does make it a bit easier with the rate look up tool you can find directly on their website.

Illinois State Sales Tax Due Dates

Illinois State Sales Tax due 20th of every month

The 20th of the every month is when the taxes are due for Illinois for monthly remittance. When you apply for a tax ID number in IL, they notify you about your frequency of filing requirements. Also, as you begin selling in the state, they’ll also notify you depending on your average sales if your filing requirements change.

Keep in mind: if the due date falls on a weekend or a holiday, your return and payment isn’t due until the next business day.

Filing on time incentive

We know that for most states and federal offices, paying anything late gets you in serious trouble. (If you don’t respond to a simple moving violation ticket then some states will eventually suspend your licence.) However, it’s pretty rare that we get a break for doing something on time. Illinois and a few other states, offer a discount for filing on time.

In Illinois, this discount is 1.75% as long as you file and pay by the due date.
If you’re an annual filer, this may not be that much, so they offer 1.75% discount or $5.00 off, whichever is greater.

Amazon Fulfillment Center?

Yes! Illinois has several fulfillment centers. This means FBA sellers out there without nexus in IL should keep an eye on their inventory. The movement of merchandise to Illinois typically triggers nexus requirements. (Or to skip the worry and double checking offers free inventory monitoring.)

Economic Nexus?

Yes. As of October of 2018, Illinois became another state to pass South Dakota like legislation. You can read the full text of the law here. What it says in a nut shell though is: you have to collect sales tax if you meet the following requirements:
-over 100,000 dollars in sales
-over 200 transactions
within the previous 12 months.

There are now over 30 states with South Dakota like economic nexus laws. More are expected to follow suit as soon as their legislative periods for the year begin.

Illinois Specifications for Tax and Remote Sellers

However, there is some good news. Illinois made it a bit simpler than other states when figuring out the tax rate remote sellers charge. Remote sellers only have to charge the 6.25% rate, and do not have to figure out the local tax rates. But what if you suddenly find yourself with FBA inventory stored in Illinois?

Now this is a question I had to call Illinois Department of Revenue on: if you have inventory in an Amazon warehouse does that mean you have physical presence and have to charge local rates? OR do you keep your remote seller status and only have to charge the flat rate?

According to the exceptionally helpful person at the Illinois Department of Revenue, and this Illinois publication, the answer is: you can’t charge the flat rate. In IL Department of Revenue’s eyes you when your merchandise moved to Illinois warehouse, you became a seller in that state, not just a seller making sales to that state.

Which local rate you charge depends on a lot of factors. Title 86, part 270 goes through the requirements, (the location of inventory is specifically mentioned on page four). If you have inventory in warehouse(s) in Illinois make sure you contact them and find out the specific rate you should be charging.

Sales Tax Holiday?

No. There is no sales tax holiday for Illinois residents.

Weirdest Tax Laws

Just like Arkansas, Illinois has an interesting view on candy. First they tax it a bit more than things that the Illinois government considers food. Food in Illinois is only subject to a 1% sales tax rate. Non-food items start out at the standard 6.25% state rate. So, a Snickers bar is taxed at 6.25% (plus possible local taxes). And a Kit-Kat would be taxed at 1%. Wait. What?

Turns out anything that has flour and doesn’t require refrigeration is considered food. It receives the much lower taxation rate. Kit-Kats, Twix, chocolate covered pretzels and ice-cream are all on the list of reduced tax items.

The taxed items list is just as specific:

  • glazed dried apricots
  • fruit roll-ups (never thought I would read an official tax regulation document that included the words fruit roll-up)
  • granola bars
  • Honey roasted peanuts, almonds, etc.

The list goes on for 3 pages explaining exactly what is and isn’t candy.

Helpful Links

We’re making our way though all fifty states. Check out our State Spotlight category to see all that we’ve done so far.

Please note: this blog is for informational purposes and should not to be considered, or used in place of, professional advice for your specific situation.

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