The 10 Basics Every Illinois Business Should Know About Sales Tax

What is the Sales Tax Rate in Illinois?

“Sales tax” is the combination of all state, local, mass transit, home rule occupation and use, non-home rule occupation and use, park district, county public safety and facilities, county school facility tax, and business district taxes.

What is Sales Tax in Illinois?

The term “sales tax” actually refers to several tax acts. Sales tax is a combination of “occupation” taxes that are imposed on sellers’ receipts and “use” taxes that are imposed on amounts paid by purchasers. Sellers owe the occupation tax to the department; they reimburse themselves for this liability by collecting use tax from the buyers.

Are All Goods and Services Taxable?

No

How Do I Know What’s Taxable and What’s Not?

This link can help you determine what is taxable and what isn’t in Illinois.

Who Pays Sales Tax?

Merchants pay sales tax out of their own pockets and are reimbursed by their customers.  It’s commonly referred to as a seller’s tax.

What Am I Responsible For?

You are required to collect sales tax, hold it secure and send it to the State on-time and in-full.

When Is My Sales Tax Payment Due in Illinois?

In Illinois your tax filing frequency is determined by your revenue. You may be a quarterly or monthly filer. Contact the state to determine your sales tax due date. Click here for the rules as to who files when.

How Do I Know How Much Sales Tax to Charge? 

“Sales tax” is the combination of all state, local, mass transit, home rule occupation and use, non-home rule occupation and use, park district, county public safety and facilities, county school facility tax, and business district taxes. Click here to find your sales tax rate. The final and definitive answer is always the sales tax rate posted on State Department of Revenue website.  Rates posted on the web are often not up-to-date and incorrect. It’s always the merchant’s responsibility to charge the correct sales tax rate..

Who Gets the Sales Tax Money?

In Illinois  all sales tax gets paid directly to the State.

How Do I Manage Tax Exempt Sales?

Tax exempt organizations such as schools and religious organizations are often exempt from sales tax. They are required to give you copy of their “TAX EXEMPT CERTIFICATE” at the time of the sale and you are required to keep this certificate on file. Failing to do so may result in you paying the sales tax out of your own pocket if you have a sales tax audit.

What if I Forget to Pay or Spend the Money and Can’t Pay?

Illinois has severe penalties for missing tax payments. You can find the penalties for late payments here. If you received a letter from the state for a late sales tax payment, you can call 800 732-8866   for assistance.   If sales tax goes unpaid, states will seize the assets of the business or owner and auction them off to pay the debt.  In extreme cases owners will be prosecuted and sent to jail. Even if the business closes, sales tax is a personal liability that will follow the owner until paid.Illinois Department Of Revenue

ILLINOIS Sales & Use TAX HELP:

Click here to find your Illinois tax rate.

(800) 732-8866