December 17, 2024
Illinois Sales Tax Guide 2025: A Step-by-Step Guide for Businesses
Table of contents
Illinois Sales Tax: 2025 Overview
Sales tax in Illinois includes a 6.25% statewide rate in 2025, with additional local taxes that can raise the combined rate to 11% in some areas. Illinois participates in the Streamlined Sales Tax initiative (SSUTA), simplifying compliance for remote sellers.
With diverse local tax rates, Illinois is a state where businesses must account for significant regional variations in sales tax.
Illinois Sales Tax Due Date
In Illinois, the due dates for paying sales taxes and filing sales tax returns depend on your assigned filing frequency, which is determined by your total taxable sales and tax liability.
Filing Frequency | Criteria | Due Date |
|---|---|---|
Monthly | Required for businesses collecting more than $200 in sales tax per month. | Due on the 20th of the following month. |
Quarterly | For businesses collecting $50–$200 in sales tax per month. | Due on the 20th of the month following the quarter (e.g., April 20 for Q1). |
Annually | For businesses collecting less than $50 in sales tax per month. | Due on January 20 of the following year. |
Key Notes
If the due date falls on a weekend or holiday, payments are typically due on the next business day.
Late filings or payments may result in penalties and interest, so timely compliance is essential.
Payments and filings can be completed through the MyTax Illinois Portal.
Illinois Sales Tax Rate in 2025
Illinois imposes a state sales tax of 6.25%, with additional local taxes levied by municipalities that can bring the combined rate up to 11% in some areas.
Tax Type | Rate | Description |
|---|---|---|
State Sales Tax | 6.25% | Applies to most retail sales of tangible personal property. |
Local Sales Tax | Varies by Location | Additional sales tax imposed by cities, counties, and special districts, ranging from 0.25% to 4.75%. |
Notes
Illinois applies a reduced sales tax rate of 1% for groceries, medications, and certain medical equipment.
The total sales tax rate depends on the location of the transaction, combining state and local rates.
2025 Illinois Local Sales Tax Rates Table
Below is a table highlighting the 20 largest cities in Illinois, along with their respective local and combined sales tax rates:
City | Local Sales Tax Rate | Total Sales Tax Rate |
|---|---|---|
Aurora | 1.75% | 8.25% |
Bloomington | 2.5% | 8.75% |
Champaign | 2.25% | 8.5% |
Chicago | 4.0% | 10.25% |
Cicero | 1.75% | 8.25% |
Decatur | 1.25% | 7.75% |
Elgin | 1.5% | 8.0% |
Evanston | 2.0% | 8.5% |
Joliet | 1.75% | 8.25% |
Naperville | 1.5% | 8.0% |
Normal | 2.5% | 8.75% |
Oak Lawn | 1.75% | 8.25% |
Orland Park | 1.75% | 8.25% |
Peoria | 2.0% | 8.5% |
Rockford | 2.25% | 8.75% |
Schaumburg | 2.0% | 8.5% |
Skokie | 2.0% | 8.5% |
Springfield | 2.0% | 8.5% |
Tinley Park | 2.0% | 8.5% |
Waukegan | 2.0% | 8.5% |
Notes
The total sales tax rate is the sum of the state rate (6.25%) and the local rate imposed by cities, counties, or special districts.
Rates vary significantly across Illinois, with Chicago having one of the highest combined rates at 10.25%.
Rates are subject to tax changes, so it’s important to verify with the Illinois Department of Revenue.
CQ For city-based tax rates in Illinois, visit our Illinois Local Sales Tax Directory and search for your city.
Illinois Sales Tax Calculator Example with Customers in Multiple Locations
An online retailer based in Texas establishes economic nexus in Illinois by exceeding $100,000 in annual sales or 200 transactions, requiring them to collect and remit sales tax for purchases made by Illinois residents. The retailer makes sales to customers in multiple cities, each with different local tax rates.
Detail | Description |
|---|---|
Business | Online retailer based in Texas with economic nexus in Illinois. |
Customer Purchases | Customer A in Chicago $1,200 total, $800 taxable, $400 exempt (e.g., groceries or medications). Customer B in Naperville $900 total, $600 taxable, $300 exempt. Customer C in Springfield $500 total, $400 taxable, $100 exempt. |
Customer Locations | Chicago 10.25% total sales tax. Naperville 8.0% total sales tax. Springfield 8.5% total sales tax. |
Illinois Sales Tax Calculations
Customer | Taxable Amount | Total Tax Rate | Total Tax Due |
|---|---|---|---|
Customer A | $800 | $800 × 10.25% = $82.00 | $82.00 |
Customer B | $600 | $600 × 8.0% = $48.00 | $48.00 |
Customer C | $400 | $400 × 8.5% = $34.00 | $34.00 |
Total Sales Tax Due in Illinois
$82.00 (Customer A) + $48.00 (Customer B) + $34.00 (Customer C) = $164.00
Key Considerations for Businesses
Location Accuracy: Use precise customer addresses to apply the correct local tax rates. For example, Chicago, Naperville, and Springfield have varying total rates.
Exemption Management: Properly identify exempt items such as groceries, prescription medications, or medical devices, and maintain exemption documentation as needed.
Tax Reporting: Track taxable and exempt sales by city for accurate reporting and timely remittance through the Illinois Department of Revenue's MyTax Illinois portal.
Kintsugi Intelligence automates location-based tax rate application, exemption management, and accurate reporting across all your one-click integrations to ERP, HR, and eCommerce systems like Shopify, BigCommerce, Amazon, Quickbooks, and Rippling.
Is there a Illinois SaaS sales tax?
Yes, Illinois imposes sales tax on Software as a Service (SaaS) in specific cases, depending on how the SaaS is classified.
Category | Details | Examples |
|---|---|---|
Taxable SaaS | SaaS products that involve providing access to prewritten software electronically are generally subject to Illinois’s 6.25% state sales tax, plus applicable local taxes. | Cloud-based accounting software, CRM tools. |
Non-Taxable SaaS | Custom software development and consulting services are typically exempt, as long as the software is not prewritten or provided for general use. | Custom software solutions. |
Requirements for Businesses | SaaS providers with nexus in Illinois must collect and remit sales tax for taxable transactions. | Out-of-state providers meeting nexus thresholds. |
Additional Considerations
Taxability depends on whether the SaaS product is classified as prewritten or customized.
Businesses can streamline compliance by getting started with Kintsugi for sales tax automation, ensuring accurate tax calculations and filings.
For further guidance, consult the Illinois Department of Revenue or a tax professional.
CQ For more details on Illinois SaaS sales tax, read Kintsugi's guide: Is SaaS Taxable in Illinois? Key Insights for Tech Companies.
Is there sales tax on clothing in Illinois?
Yes, Illinois imposes sales tax on clothing, but the rate and exemptions depend on the type of clothing:
Category | Details |
|---|---|
Taxable Clothing | Most clothing and footwear are subject to Illinois’s state sales tax of 6.25%, plus applicable local sales taxes. |
Reduced Rate Items | Certain qualifying essentials, such as diapers and baby clothing, may be taxed at a reduced rate of 1%. |
Annual Sales Tax Holiday | Illinois occasionally offers a back-to-school tax holiday where clothing, footwear, and school supplies are taxed at reduced rates. |
CQ For more details on sales tax on clothing in Illinois, read Kintsugi's guide: Does Illinois Have Sales Tax on Clothing in 2025? Key Information for Businesses.
FAQs
What is the Illinois state sales tax rate?
Illinois has a 6.25% state sales tax, with local taxes that can bring the total rate to 11% in some areas.
How do you calculate Illinois sales tax rates?
Use a sales tax calculator to multiply the taxable amount by the 6.25% state rate and add applicable local taxes, which vary by city or county.
Sales Tax Nexus in Illinois
Sales tax nexus in Illinois establishes a business's obligation to collect and remit sales tax, triggered by physical presence, economic activity, or relationships with in-state entities.
Type of Nexus | Description | Threshold/Criteria |
|---|---|---|
Physical Nexus | Created by having a physical presence in Illinois, such as a location, employees, or inventory. | Office, warehouse, storefront, or employees operating in Illinois. |
Economic Nexus | Triggered by making substantial sales into Illinois, even without a physical presence. | More than $100,000 in gross sales or 200 separate transactions in the current or previous year. |
Affiliate Nexus | Created through relationships with in-state businesses that help facilitate sales. | An Illinois-based affiliate promotes or sells products for the out-of-state retailer. |
Marketplace Nexus | Applies to sales made through marketplace facilitators operating in Illinois. | Facilitators must collect and remit sales tax on behalf of sellers. |
Click-Through Nexus | Established through online referrals by Illinois-based individuals or businesses. | Sales exceed $10,000 annually from Illinois-based referrals. |
Inventory Nexus | Triggered by storing inventory in Illinois, even if through a third party (e.g., warehouses). | Any physical inventory located in Illinois. |
Employee or Agent Nexus | Having employees, independent contractors, or agents perform services in Illinois. | Sales or service activities conducted by representatives in Illinois. |
Notes
Illinois uses both physical presence and economic presence to determine sales tax nexus.
Businesses with nexus in Illinois must register for a sales tax permit and collect sales tax on taxable sales, which may include use tax obligations.
Marketplace facilitators are responsible for collecting and remitting sales tax for third-party sales made through their platforms.
FAQs
What is the sales tax nexus in Illinois?
Sales tax nexus in Illinois is established through physical presence or economic nexus, triggered by exceeding $100,000 in annual sales or 200 transactions in the state.
Illinois Sales Tax Exemptions in 2025
In 2025, Illinois maintains its 6.25% state sales tax, with exemptions for groceries, prescription medications, medical devices, and most clothing priced under $125 during sales tax holidays.
What is a Illinois state tax-exempt certificate?
An Illinois state tax-exempt certificate, also known as Form ST-587, is a document that allows eligible buyers to make tax-exempt purchases in Illinois. It certifies that the buyer qualifies for sales tax exemptions under Illinois sales tax law.
Purpose: Used for transactions exempt from sales tax, such as purchases by government agencies, nonprofit organizations, or for resale purposes.
Usage: The buyer provides the certificate to the seller at the time of purchase to avoid paying sales tax.
Retention: Sellers must keep a copy of the certificate on file to validate tax-exempt transactions in case of an audit.
Valid Reasons for Exemption
Exemption Category | Description | Examples |
|---|---|---|
Resale | Items purchased for resale. | Products bought by retailers for inventory. |
Manufacturing | Qualifying equipment and materials used in production. | Machinery, raw materials for production. |
Nonprofit Organizations | Tax-exempt entities making qualified purchases. | Purchases by charitable organizations. |
Government Agencies | Federal, state, or local government entities. | Office supplies bought by government offices. |
Agricultural Use | Items used exclusively in farming operations. | Tractors, feed, and seed. |
What is exempt from sales tax in Illinois?
Over 60% of Illinois businesses face complexities in navigating state-specific sales tax rules, including exemptions for agriculture, manufacturing, and essential goods.
This table simplifies key exemptions to support compliance and cost savings:
Category | Exempt Items |
|---|---|
Essential Goods | Prescription and non-prescription medications, medical appliances, and certain food products. |
Nonprofit Organizations | Purchases by qualifying charitable, religious, and educational organizations. |
Government Entities | Transactions made by federal, state, and local government agencies. |
Agricultural Products | Seeds, fertilizers, pesticides, and farm machinery used in production. |
Manufacturing | Machinery and equipment used directly in the manufacturing process. |
Resale | Items purchased for resale are exempt with proper documentation. |
Educational Materials | Textbooks and educational supplies purchased for school use. |
Occasional Sales | Casual or infrequent sales by individuals not engaged in regular business activities. |
Additional Notes
Illinois applies a reduced sales tax rate of 1% for qualifying food, drugs, and medical appliances.
Certain exemptions, such as for agricultural or manufacturing equipment, require a valid exemption certificate.
CQ For more details on Illinois sales tax exemptions, read Kintsugi's guide: How 2025 Illinois Sales Tax Exemption Benefits Your Business.
Illinois Sales Tax Permits, Registration, and Filing in 2025
This section simplifies obtaining permits, filing sales tax returns, and meeting payment deadlines effectively for businesses with buyers in Illinois.
How do I get a Illinois sales tax permit?
To obtain a sales tax permit in Illinois, follow these steps:
Register Online: Visit the MyTax Illinois portal to start your registration for a sales tax permit.
Provide Business Details: Submit information such as your business name, address, type of business entity, and federal EIN or Social Security number.
Pay the Registration Fee: Illinois does not charge a fee for obtaining a sales tax permit.
Receive Your Permit: Once approved, you'll receive an Illinois Business Tax (IBT) number, which allows you to collect and remit sales tax.
Note: Illinois requires businesses with physical or economic nexus to register and obtain a sales tax permit before collecting sales tax.
How do I submit a Illinois sales tax registration?
To register for Illinois sales tax, follow these steps. Illinois also offers customer support for registration through the Illinois Department of Revenue (IDOR) at (800) 732-8866.
Determine if You Need to Register
You must register for Illinois sales tax if your business:
Has a physical presence (nexus) in Illinois (e.g., office, warehouse, employees).
Meets economic nexus thresholds by making over $100,000 in gross receipts or 200 or more separate transactions annually in Illinois.
Gather Required Information
Before starting, ensure you have:
Business Information: Legal name, DBA (if applicable), federal EIN or SSN.
Address Details: Physical and mailing addresses.
Business Type: LLC, sole proprietorship, corporation, etc.
Sales Estimates: Estimated taxable sales in Illinois.
Bank Account Information: For filing and payment setup.
Register Online
Visit the Illinois Department of Revenue (IDOR) website.
Create an account or log in to the MyTax Illinois portal.
Select Register a New Business and follow the prompts to complete your registration for Illinois sales tax.
Submit Application
Review the form for accuracy before submitting.
Once approved, you will receive an Illinois Account ID, which allows you to collect and remit sales tax.
Begin Collecting and Filing Sales Tax
Start collecting Illinois sales tax on taxable transactions.
File and remit collected sales tax through the MyTax Illinois portal based on your assigned filing frequency (monthly, quarterly, or annually).
Illinois Sales Tax Filing
This section breaks down Illinois' sales tax requirements, including filing rules, taxable items, and permits.
What are the main Illinois filing requirements?
Illinois sales tax filing requirements depend on the size and frequency of taxable sales:
Filing Frequency: Businesses must file monthly, quarterly, or annually based on their total sales tax liability.
Due Date: Returns are due on the 20th of the month following the reporting period.
Filing Method: Returns must be filed electronically through the MyTax Illinois portal.
Additional Requirements: Businesses must report all taxable and exempt sales and remit payment for collected taxes by the due date to avoid penalties and interest.
Filing Frequency Criteria
Filing Frequency | Criteria |
|---|---|
Monthly | For businesses collecting $200 or more in sales tax per month. |
Quarterly | For businesses collecting less than $200 in sales tax per month but more than $50 per quarter. |
Annually | For businesses collecting $50 or less in sales tax per quarter. |
Note: Illinois requires electronic filing and payment for most businesses. Retailers must also report local sales taxes, which vary based on the location of the sale. Accurate reporting of exempt and taxable sales is critical to compliance.
What does Illinois sales tax apply to?
Illinois sales tax applies to the following categories, with certain exemptions such as for groceries, prescription medications, and medical devices.
Category | Description | Examples |
|---|---|---|
Tangible Personal Property | Most goods, unless exempt. | Furniture, electronics, clothing (if taxable). |
Taxable Services | Certain services are subject to sales tax. | Amusements, telecommunications, some repairs. |
Digital Goods | Digital products transferred electronically. | Prewritten software, e-books, digital media. |
Leases and Rentals | Rentals of equipment and property. | Equipment rentals, car rentals. |
Prepared Foods | Meals and drinks sold by food service businesses. | Restaurant meals, takeout, catering. |
Note: Illinois also allows local jurisdictions to impose additional sales taxes, resulting in combined rates that can exceed the 6.25% state base rate. Businesses must accurately track and report sales by location.
How to file sales tax in Illinois
To file sales tax in Illinois, follow these steps:
Log in to MyTax Illinois: Access the MyTax Illinois portal using your credentials.
Complete the Sales Tax Return: Enter total taxable sales, exempt sales, and any applicable local sales taxes.
Calculate Tax Due: MyTax Illinois automatically calculates the sales tax owed based on your entries and local tax rates.
Submit Payment: Pay electronically through the portal or by other approved methods.
Meet Deadlines: Returns are due by the 20th of the month following the reporting period (monthly, quarterly, or annually, depending on your assigned frequency).
Maintain Records: Keep copies of filed returns and payment confirmations for audit purposes.
CQ Important Note: Illinois requires businesses to report state and local sales taxes separately. Accurate tracking of taxable and exempt sales is essential for compliance.
FAQs
What day is Illinois sales tax due?
Illinois sales tax is due on the 20th of the month following the reporting period for monthly and quarterly filers, or January 20th for annual filers.
Does Illinois have a sales tax holiday?
Yes, Illinois occasionally offers sales tax holidays, such as back-to-school periods, where eligible items are taxed at reduced rates or are exempt.
Automate Your Illinois Sales Tax with Kintsugi
Managing Illinois sales tax compliance can be complex, from verifying local tax rates to using a tax rate lookup, tracking exemptions, and meeting filing deadlines. Kintsugi simplifies this process with powerful automation tools designed for modern businesses.
Feature | Description |
|---|---|
Accurate Tax Rate Calculations | Automatically apply the correct state and local sales tax rates based on your customer’s location. |
Exemption Management | Seamlessly identify and apply exemptions for groceries, prescription medications, and other qualifying items. |
Effortless Filing | Streamline your tax reporting and filing process with integrations that calculate, track, and submit sales tax payments. |
ERP and eCommerce Integration | Connect with platforms like Shopify, QuickBooks, Amazon, and more for seamless tax data management. |
Let Kintsugi handle the complexities of Illinois sales tax so you can focus on growing your business. Visit our Product Platform and Pricing pages to learn more and get started today!
