Learn how the Illinois Retailers' Occupation and Use Tax Acts work: who collects, 2026 State and local rates, filing dates and penalties, with slides.
Last reviewed October 29, 2026 · General information, not legal advice
General information only, not legal advice. CPA Tax Payroll and Accounting Corp is a CPA firm, not a law firm. Laws change: confirm with the official source or a licensed attorney before you act. Read the full notice.
Illinois sales tax is two laws working together. The Retailers' Occupation Tax Act taxes the seller's receipts from retail sales of tangible personal property, meaning goods you can touch. The Use Tax Act taxes the buyer for using those goods in Illinois. The Illinois Department of Revenue (IDOR) runs both. This page is for owners of stores, restaurants and online shops.
Slide show: Illinois sales and use tax in seven slides
What the law does
Two taxes make up Illinois sales tax: the Retailers' Occupation Tax falls on the seller, and the Use Tax falls on the buyer.
Who it covers
Retailers, lessors of goods, remote sellers at the $100,000 mark, marketplace facilitators and buyers not charged Illinois tax.
The rule
Sellers register with IDOR and collect tax on retail sales of goods. Illinois does not tax sales of service, but it taxes goods transferred with a service.
The numbers
The State rate is 6.25%, or 1% for qualifying drugs and medical appliances. Local and transit taxes add more: on 1 August 2026, Chicago was 10.50% and Naperville's Will part 8.00%.
Deadlines
Form ST-1 is due the 20th of the month after the period. Electronic filing is required when annual gross receipts average $20,000 or more.
Penalties
Late payment costs 2% for 1 to 30 days and 10% after that. Interest is 7% a year through 31 December 2026.
Tip
Rates change each 1 January and 1 July, and sometimes mid-year, so look up each address.
Who is covered
Seller or buyer
Rule in brief
Illinois retailer, including a lessor of goods
Registers with IDOR and collects State plus local tax at the origin rate. Leasing goods counts as retail since 1 January 2025 (registered vehicles, boats, aircraft and semitrailers excepted).
Out-of-state seller with a physical presence
Covered like an Illinois retailer; the origin or destination rate applies, depending on where each sale is sourced.
Remote retailer with no physical presence
Covered for sales from 1 January 2026 once Illinois receipts reach $100,000 in the look-back 12 months. The 200-transaction test ended 31 December 2025.
Marketplace facilitator
Same $100,000 test from 1 January 2026; collects destination-rate tax for its sellers.
Buyer not charged Illinois tax
Owes Use Tax at 6.25%, or 1% for qualifying drugs and medical appliances, less tax paid to another state.
Reseller
Buys without tax if the seller holds a valid Certificate of Resale (Form CRT-61) and the buyer's Illinois account ID is active; out-of-state buyers reselling only outside Illinois are excepted.
Exempt buyer
Governments, charitable, religious or educational nonprofits holding an IDOR exemption number, and others.
How it touches your taxes and payroll
Sales and use taxes are trust-fund taxes: a seller collects them from customers and holds them for the State, and a responsible person who willfully fails to remit can be personally liable for the unpaid amount. Use tax on business purchases made without Illinois tax is self-assessed on Form ST-44, or on Form ST-1 by registered sellers. Out-of-state sellers can read our sales tax nexus guide and remote-retailer amnesty update.
