Illinois state seal

IllinoisSales Tax

A Complete Guide For Businesses

State Rate
6.25%

Local Tax
yes

State Portal
Department of Revenue

Phone
(217) 782-3336

General requirements

Illinois is an origin-based state (sales are taxed where the seller is located).

  • Sales tax is charged on the sale of tangible personal property (TPP) for use or consumption
  • Illinois sales tax has 3 rate structures - one for general merchandise, one for qualifying food and drugs, and one for items required to be titled or registered

File your sales tax online using MyTax Illinois.

Rates

Illinois’ sales tax rate is 6.25% on general merchandise and 1% on qualifying foods, drugs, and medical appliances.

The tax rate may be higher in some areas due to numerous additional local and home rule taxes. Use the Tax Rate Finder to find specific tax rates in Illinois.

How food is taxed

Grocery-type food items are taxed at a reduced 1% rate, while prepared foods for immediate consumption are taxed at the full 6.5% plus local rate.

Nexus in Illinois

Business activities that establish a minimum tax connection to the state include:

  • Having an office, agent, or representative in the state
  • Have a place from which you deliver or produce products in the state

Online activities that establish nexus in Illinois include:

  • Having an affiliate or referral relationship with a contractor or representative in the state
  • Sales from these referrals exceed $10,000 during each of the prior 4 quarters

Find more information about nexus in Illinois.

Filing schedule

Most taxpayers are required to file monthly returns. All returns are due on the 20th of the month following the reporting period.

The Department will notify you if you qualify to file returns quarterly or annually. Taxpayers whose average tax due is at least $20,000 per month, will be notified and required to make 4 tax payments per month.

Taxpayers are allowed to take a 1.75% discount for timely filing and payment.

Registering to collect sales tax in Illinois

There are 3 ways to register your business and receive a Certificate of Registration:

Penalties

Late returns incur penalties and interest. The Department states that in the event of late filing or late payment, “We encourage you to let us calculate your penalties and interest and bill you.”

More information about penalties and interest charged on late returns can be found here.