# Illinois Sales Tax Guide (2026)

Canonical: https://trykintsugi.com/sales-tax-guides/usa/illinois
Published: September 22, 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 Economic nexus starts at $100,000, and the 200-transaction test was repealed in 2026 — volume alone no longer creates an obligation.

- **SaaS:** Exempt
- **Clothing:** Taxable
- **Groceries:** Partial
- **Digital Goods:** Exempt

- **Effective date::** 
- **Scheduled change::** 

## 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 January 1, 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 January 1, 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].

## Taxability Snapshot

## Sales Tax Rates

Illinois levies a 6.25% state Retailers' Occupation Tax on general merchandise. Local taxes push combined rates as high as 10.50% in Chicago. Two changes took effect January 1, 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%–11.25% | Varies by location |

Combined rates in major Illinois cities (2026):

| City | Combined rate |
| --- | --- |
| Chicago | 10.50% |
| Rockford | 8.75% |
| Springfield | 10.25% |
| Joliet | 9.00% |
| Aurora | 8.50% |
| Naperville | 8.00% |

To find the combined rate for a specific address, use our [US sales tax calculator](/us-sales-tax-calculator).

## Registration or Nexus Threshold

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 January 1, 2026, so the dollar threshold is the only economic trigger. Physical presence creates nexus immediately.

## Marketplace Facilitator Law

Illinois Department of Revenue Bulletin FY 2026-12 states that, beginning January 1, 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 March 31, 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]

## Filing Frequency & Deadlines

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.

#### Exemptions

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 January 1, 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.

## Resale & Exemption Certificates

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].

## Penalties

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. Misreporting destination data can draw a 15% assessment.

## Audits & Appeals

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

- [1] [Illinois DOR — Sales Tax Rate (6.25% state)](https://tax.illinois.gov/questionsandanswers/answer.139.html)

- [2] [Illinois DOR — Bulletin FY 2026-12 (economic nexus, 200-transaction test removed)](https://tax.illinois.gov/research/publications/bulletins/fy-2026-12.html)

- [3] [Illinois DOR — SaaS and digital products not taxed](https://tax.illinois.gov/questionsandanswers/answer.145.html)

- [4] [Illinois DOR — Bulletin FY 2026-03 (grocery tax elimination)](https://tax.illinois.gov/research/publications/bulletins/fy-2026-03.html)

- [5] [Illinois DOR — Certificate of Resale (CRT-61)](https://tax.illinois.gov/businesses/crtinfo.html)

- [6] [Illinois DOR — Dispute Resolution (60-day protest, Tax Tribunal)](https://tax.illinois.gov/programs/dispute.html)

- [7] [Illinois DOR — Bulletin FY 2026-30 (2026 back-to-school sales tax holiday)](https://tax.illinois.gov/research/publications/bulletins/fy-2026-30.html)

- [8] [Illinois DOR — Business Registration (MyTax Illinois)](https://tax.illinois.gov/businesses/registration.html)

- [9] [Illinois Department of Revenue — Bulletin FY 2026-12](https://tax.illinois.gov/research/publications/bulletins/fy-2026-12.html)

Verified July 2026 against Illinois Department of Revenue published guidance.

## Frequently Asked Questions

### What is the Illinois sales tax rate in 2026?

6.25% state on general merchandise, up to 10.50% combined in Chicago and as high as 11.25% elsewhere.

### What is Illinois' economic nexus threshold?

$100,000 in cumulative gross receipts over the preceding 12 months. The 200-transaction test ended January 1, 2026.

### Did Illinois change its sourcing rules in 2026?

Not the sourcing rule itself. Remote retailers already collected destination-based tax, and Illinois retailers' sales sourced outside Illinois moved to destination rates on January 1, 2025. The 2026 change adds a 15% rate when a retailer can't document a destination-based sale's location.

### Are groceries taxed in Illinois?

The statewide 1% grocery tax ended January 1, 2026, but municipalities may impose their own grocery tax up to 1%.

### Is SaaS taxable in Illinois?

Generally no at the state level, but Chicago applies its Personal Property Lease Transaction Tax to cloud software.

### When are Illinois sales tax returns due?

Form ST-1 is due the 20th of the month after the reporting period.

## Related Reading

- [Does Illinois Have Sales Tax on Clothing in 2026? Key Information for Businesses](/blog/does-illinois-have-sales-tax-on-clothing)

- [How 2026 Illinois Sales Tax Exemption Benefits Your Business](/blog/illinois-sales-tax-exemption)

- [Is SaaS Taxable in Illinois? Key Insights for Tech Companies](/blog/is-saas-taxable-in-illinois-insights-for-tech-companies)

## US Sales Tax Calculator