Illinois Sales Tax Rate, Rules & Filing (2026)
Illinois runs a 6.25% base rate that hits 10.5% in Chicago. Economic nexus starts at $100,000, and the 200-transaction test was repealed in 2026 — volume alone no longer creates an obligation.
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Key Takeaways
Illinois's state sales tax (Retailers' Occupation Tax) base rate is 6.25%, with local taxes pushing combined rates above 10% in Chicago [1]. You have economic nexus once cumulative gross receipts from Illinois sales reach $100,000 over the preceding 12 months; the 200-transaction test was removed on 1 January 2026 [2]. SaaS and digital products are not taxed at the state level, though Chicago imposes its own lease transaction tax on some cloud products, and groceries lost the 1% state tax on 1 January 2026 while local governments may levy their own 1% [3][4]. Protest an assessment within 60 days, with the Independent Tax Tribunal handling disputes above $15,000 [6].
What is taxable in Illinois?
SaaS
Exempt
Clothing
Taxable
Groceries
Partial
Digital Goods
Exempt
What are the sales tax rates in Illinois?
Illinois levies a 6.25% state Retailers' Occupation Tax on general merchandise. Local taxes push combined rates as high as 10.25% in Chicago. Two changes took effect 1 January 2026: the 200-transaction economic nexus test was removed, and the statewide 1% grocery tax ended (municipalities may reimpose their own up to 1%).
Component | Rate | Scope |
|---|---|---|
State (ROT) | 6.25% | General merchandise |
Local | up to ~5% | Varies by location |
Combined | 6.25%–11.00% | Varies by location |
To find the combined rate for a specific address, use our US sales tax calculator.
What is the sales tax registration and nexus threshold in Illinois?
Illinois economic nexus is triggered when your cumulative gross receipts from sales into the state reach $100,000 over the preceding 12 months. The 200-transaction test was removed effective 1 January 2026, so the dollar threshold is the only economic trigger. Physical presence creates nexus immediately.
What is the marketplace facilitator law in Illinois?
Illinois Department of Revenue Bulletin FY 2026-12 states that, beginning 1 January 2026, the former 200-transaction test no longer applies to remote retailers or marketplace facilitators, leaving a single threshold of at least $100,000 in cumulative gross receipts from Illinois sales during the applicable lookback period — the same threshold used for Illinois's general remote-retailer economic nexus test. A marketplace facilitator meeting that threshold must collect and remit destination-based state and local Retailers' Occupation Tax on sales it facilitates for marketplace sellers, evaluated on a rolling quarterly basis for quarters beginning after 31 March 2026; a facilitator with physical presence in Illinois must keep collecting on its own Illinois sales even if it falls below the threshold. Sales made through a registered, collecting marketplace facilitator generally do not count toward an individual marketplace seller's own separate remote-retailer threshold.[9]
What are the sales tax filing frequencies and deadlines in Illinois?
Illinois assigns monthly, quarterly, or annual filing based on prior-year liability. Returns (Form ST-1) are due the 20th of the month following the reporting period. Larger filers may owe quarter-monthly prepayments. For the portal, return, and step-by-step, see our guide to filing Illinois sales tax online.
What is exempt from sales tax in Illinois?
Illinois taxes qualifying prescription and over-the-counter medicines and medical devices at a reduced 1% rate rather than exempting them. Groceries also fell under the 1% rate until the statewide grocery tax ended 1 January 2026, though municipalities may impose their own up to 1%. SaaS is generally not subject to the state Retailers' Occupation Tax, but Chicago levies its own Personal Property Lease Transaction Tax on cloud software.
How do resale and exemption certificates work in Illinois?
Illinois buyers document a resale purchase with Form CRT-61 (Certificate of Resale), given to the seller rather than filed with the state [5]. A blanket certificate should be updated at least every three years, and the seller retains it for at least three and a half years [5].
For the official form, multistate certificate rules and expiry, see the Illinois resale certificate guide.
What are the sales tax penalties in Illinois?
A late return carries a penalty of the lesser of $250 or 2% of the tax due; if you still don't file within 30 days of a nonfiling notice, an additional penalty of the greater of $250 or 2% applies, capped at $5,000. Late payment adds 2% if 1–30 days late and 10% if 31 or more days late. If a retailer does not supply enough information to identify where a sale is delivered, Illinois assesses tax on that sale at 15%. Our Illinois filing guide lists late filing penalties, interest, and what to do if you missed a return.
How do sales tax audits and appeals work in Illinois?
You must protest within 60 days of a notice of your protest rights, either through an Illinois Department of Revenue hearing or the Illinois Independent Tax Tribunal [6]. The Tax Tribunal has jurisdiction when the amount at issue exceeds $15,000 [6].
Sources
[2] Illinois DOR — Bulletin FY 2026-12 (economic nexus, 200-transaction test removed)
[4] Illinois DOR — Bulletin FY 2026-03 (grocery tax elimination)
[6] Illinois DOR — Dispute Resolution (60-day protest, Tax Tribunal)
[7] Illinois DOR — Bulletin FY 2026-30 (2026 back-to-school sales tax holiday)
Verified July 2026 against Illinois Department of Revenue published guidance.
Frequently Asked Questions
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