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Illinois Sales Tax Exemptions

  • Apr 7, 2016 | Jessica Sillers

It’s smart to get familiar with sales tax exemptions when you start doing business in a new state. Reading through the full list can be daunting, especially since Illinois maintains a record of many expired exemptions on its Department of Revenue website. Here are some of the important -- and current -- exemptions to consider in Illinois sales tax law.

Nonprofits. As usual, many nonprofit organizations can apply for tax-exempt status. The Land of Lincoln, as you may expect, is pretty strict about honesty. Qualifying organizations need to operate exclusively for charitable, religious, or educational purposes. One important exception to this rule is homeschoolers: A public or private school fundraiser doesn’t need to collect sales tax on bake sale cookies, but individual homeschooling families don’t count as organizations, so they don’t get the tax break.

Agriculture and shipping. Illinois sales tax law also gives farmers and some ship captains a helping hand. Farm machinery and chemicals are exempt from sales tax. Corn and soybean crops are an important boost for the state economy, so lawmakers want to make it easier for farmers to do their job. Taking sales tax out of the equation for planting and harvesting machines helps get crops to customers. By water, there’s a sales tax exemption on fuel for ships and other vessels that transport property and people for hire along the rivers bordering the state. The only catch is that the fuel needs to be delivered to the vessel while the ship is floating in the river.

Nursing home supplies. Nursing home residents may face a change soon. Since 2001, sales of most food, beverages, and medicines and medical supplies have been exempt from tax for people who live in long-term care facilities. That provision is due to expire at the end of June this year. If it’s not renewed, hospitals and nursing homes may have to get used to some additional tax paperwork. In the meantime, not-for-profit hospitals and nursing homes can keep their dining facilities sales tax free.

Newspapers and magazines. The state of journalism may be worse for the wear these days, but at least you can still buy a sales tax-free newspaper or magazine to flip through anywhere you find yourself in Illinois.

Learn more by reading our Illinois state sales tax guide.

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Jessica Sillers
Avalara Author Jessica Sillers