Illinois Sales Tax Overview
- Feb 3, 2015 | Gail Cole
Retailers in Illinois, as in all states with sales tax, must collect the correct amount of sales tax on all taxable transactions and remit it to the state department of revenue. For exempt transactions, retailers must obtain and retain proof that a buyer is entitled to purchase a taxable good without paying sales tax on it; without it, the seller is liable for sales tax on that transaction. Finally, businesses are required to pay use tax on all taxable goods purchased without sales tax (as from an internet vender), or purchased for resale and then used instead of being resold.
General merchandise is subject to the state sales tax rate of 6.25% plus “any locally-imposed and Department-administered taxes on general merchandise.”
Sales of certain food, drug and medical appliances qualify for the state reduced rate of 1% plus “any locally-imposed and Department-administered taxes on food, drugs, and medical appliances.”
Local taxes in Illinois may include the following:
- Regional Transportation Authority (RTA) Tax: Cook, DuPage, Kane, Lake, McHenry, and Will counties
- Metro-East Mass Transit District (MED) Tax: Madison and St. Clair counties.
- DuPage Water Commission Tax: Cook, DuPage, and Will counties.
- Applies to general merchandise only.
- Home-rule, Non-home rule, County School Facility, County Public Safety /Public Facilities/Transportation Sales Tax, Metro-East, Park and Recreation District Tax
- These taxes “do not apply to the sales of food, drugs, and medical appliances or items that must be titled and/or registered.”
“Local governments may also impose taxes on general merchandise or food, drugs, and medical appliances,” provided they administer the taxes themselves “using a form of their own.”
Find accurate rates for all jurisdictions in Illinois. Learn more.
In addition to sales tax, Illinois vendors of prepaid wireless telecommunications service must also collect and remit an E911 Surcharge on sales of prepaid wireless telecommunications service. The surcharge is due “only on the portion of the receipt that is from the retail transaction of prepaid wireless telecommunications service.” However, if the sale of other tangible personal property is bundled on the receipt/invoice with the sale of prepaid wireless telecommunications service, the E911 surcharge applies to the whole transaction.
E911 Surcharge rates
The E911 Surcharge rate for non-Chicago locations is 1.5%.
The E911 Surcharge rate for Chicago locations is currently 9%. On July 1, 2015, it will drop to 7%.
Taxpayers who file sales tax returns on time are permitted to take a “discount of 1.75% of the tax collected on receipts of sales of tangible personal property.”
Taxpayers who file the E911 Surcharge on time may take a 3% discount of the E911 Surcharge collected from consumers.
Additional information, including common exemptions and details on how to file electronically, are available on the Retailers Overview of Sales and Use Tax and Prepaid Wireless E911 Surcharge.
Simplify sales tax
Simplify sales tax management and increase compliance in all states by implementing automated sales tax Software-as-a-Service (SaaS). Learn more.