Sales & Use Taxes
Statutory References
- Retailers’ Occupation Tax 35 ILCS 120/1 to 120/14
- Service Occupation Tax 35 ILCS 115/1 to 115/21
- Service Use Tax 35 ILCS 110/1 to 110/21
- Use Tax 35 ILCS 105/1 to 105/22
Electronic Services
Definitions
Home Rule
Depending upon the location of the sale, the actual sales tax rate may be higher than the fundamental rate because of home rule, non-home rule, water commission, mass transit, park district, and county public safety sales taxes.Motor fuel “prepaid sales tax”
Motor fuel distributors must collect “prepaid sales tax” on the motor fuel sold for resale to a retailer who is not an Illinois licensed motor fuel distributor or supplier of diesel and dieselhol. The retailer prepays the sales tax to the motor fuel distributor and then claims a credit for the prepaid tax when the sales tax return is filed.Sales Tax
"Sales tax” is imposed on a seller’s receipts from sales of tangible personal property for use or consumption. Tangible personal property does not include real estate, stocks, bonds, or other “paper” assets representing an interest.If the seller (typically an out-of-state business, such as a catalog company or a retailer making sales on the Internet) does not charge Illinois Sales Tax, the purchaser must pay the tax directly to the department.
The term “sales tax” actually refers to several tax acts. Sales tax is a combination of “occupation” taxes that are imposed on sellers’ receipts and “use” taxes that are imposed on amounts paid by purchasers. Sellers owe the occupation tax to the department; they reimburse themselves for this liability by collecting use tax from the buyers. "Sales tax” is the combination of all state, local, mass transit, water commission, home rule occupation and use, non-home rule occupation and use, park district, and county public safety taxes.
For purposes of this document, Illinois Sales Tax has three rate structures — one for qualifying food, drugs, and medical appliances; one for items required to be titled or registered (vehicles); and another for all other general merchandise.
Qualifying food
"Qualifying food" applies to food not prepared by the retailer for immediate consumption, such as grocery store food items. “Qualifying food, drugs, and medical appliances” include:- food that has not been prepared for immediate consumption, such as most food sold at grocery stores, excluding hot foods, alcoholic beverages, and soft drinks;
- prescription medicines and nonprescription items claimed to have medicinal value, such as aspirin, cough medicine, and medicated hand lotion, and
- prescription and nonprescription medical appliances that directly replace a malfunctioning part of the human body, such as corrective eyewear, contact lenses, prostheses, insulin syringes, and dentures.
Vehicles
“Vehicles” includes:- motor vehicles, ATVs, watercraft, aircraft, trailers, and mobile homes; and
- motor vehicles, aircraft, and vessels owned by a business when that business moves into or relocates to Illinois.
Other general merchandise
“Other general merchandise” includes sales of most tangible personal property including sales of:- soft drinks;
- prepared food such as food purchased at a restaurant;
- photo processing (getting pictures developed);
- prewritten and “canned” computer software;
- prepaid telephone calling cards and other prepaid telephone calling arrangements;
- repair parts and other items transferred or sold in conjunction with providing a service under certain circumstances based on the actual selling price.
Tax Rates
The fundamental rate for:- Qualifying food, drugs, and medical appliances is 1%.
- Items required to be titled or registered is 6.25%.
- Other general merchandise is 6.25%.
- Motor fuel “prepaid sales tax" on Gasohol is $0.05 per gallon.
- Motor fuel “prepaid sales tax" on a ll other motor fuels is $0.06 per gallon.
Local Taxes
Units of local government may impose additional taxes or fees, which the department does not collect. Contact your units of local government (county, municipal, mass transit, etc.) to determine if you must pay any additional taxes or fees.Forms/Filing & Payment Requirements
Most of the forms listed in the following paragraphs are pre-printed by the department and mailed to you. If you need a copy of one of these forms, please contact the Central Registration Division at 217 785-3707.Titled or registered items (these forms are not available on-line)
Registered Illinois dealers who sell vehicles, watercraft, aircraft, trailers, and mobile homes must file Form ST-556, Sales Tax Transaction Return, within 20 days of the delivery date.Individuals who purchase items that must be titled or registered in Illinois from an out-of-state retailer (i.e., dealer, lending institution, leasing company selling at retail, or leasing company leasing items to Illinois residents) must file Form RUT-25, Use Tax Transaction Return, on the date the Illinois title and registration is applied for, but not more than 30 days after the date the item is brought into Illinois.
Individuals who purchase (or acquire by gift or transfer) motor vehicles that must be titled or registered from another individual or private party must file Form RUT-50, Vehicle Use Tax Transaction Return, within 30 days from the date the vehicle is purchased or acquired. (See “Vehicle Use Tax”) Individuals who acquire (by gift, donation, transfer, or non-retail purchase) aircraft or watercraft that must be registered must file Form RUT-75, Aircraft/Watercraft Use Tax Transaction Return, no later than 30 days from the date the item was acquired or the date the item was brought into Illinois, whichever is later. (See “Aircraft Use Tax” and “Watercraft Use Tax”.)
Prepaid sales tax on motor fuel
Motor fuel distributors file Form PST-1, Prepaid Sales Tax Return, monthly on the 20th day of the month following the month for which the return is filed. NOTE: Retailers claim a credit for the amount of prepaid sales tax on Form ST-1, Sales and Use Tax Return, Line 17 (this form is not available on-line).Qualifying food, drugs, and medical appliances and other general merchandise
Registered Illinois retailers and servicepersons file Form ST-1, Sales and Use Tax Return (this form is not available on-line), monthly, quarterly, or annually, based on the taxpayer’s average monthly liability. The department determines how often a return must be filed.- A monthly return is due the 20th day of the month following the month for which the return is filed.
- A quarterly return is due the 20th day of the month following the quarter for which the return is filed.
- An annual return is due January 20th of the year following the year for which the return is filed.
Illinois residents who make purchases from non-registered out-of-state retailers (such as catalog or Internet transactions) or those who make purchases from servicepersons who do not pay use tax directly to us must file Form ST-44, Illinois Use Tax Return.
- If less than $600 is owed, the return and tax is due April 15th of the year after the year in which the purchase was made.
- If the total tax liability for the year is more than $600, the return and tax is due the last day of the month following the month in which the purchase was made.
Tangible personal property sold at retail over the Internet is taxed in the same manner as any other retail sale. Generally, if the item of tangible personal property is purchased from an
- Illinois retailer, the retailer is responsible for collecting and remitting Illinois sales tax.
- Out-of-state retailer who does not collect Illinois sales tax, the purchaser owes use tax and is responsible for paying use tax directly to the department using Form ST-44.
Quarter-monthly payments
If a retailer or serviceperson’s average monthly liability is $20,000 or more, quarter-monthly payments must be made. Payments are due the 7th, 15th, 22nd, and last day of the month. Because the statutory threshold for mandated electronic funds transfer (EFT) program participation is $200,000 annual liability, most taxpayers will remit their quarter-monthly payments by EFT. Taxpayers who mail their quarter-monthly remittances to the department must complete Form RR-3, Sales and Use Tax Quarter-monthly Payment. NOTE: Electronic funds transfer program participants do not complete or mail Form RR-3.If a motor fuel distributor’s average monthly liability is $20,000 or more, quarter-monthly payments must be made. Payments are due the 7th, 15th, 22nd, and last day of the month. Because the statutory threshold for mandated electronic funds transfer (EFT) program participation is $200,000 annual liability, most taxpayers will remit their quarter-monthly payments by EFT. Taxpayers who mail their quartermonthly remittances to the department must complete Form PST-3, Prepaid Sales Tax on Motor Fuel. NOTE: Electronic funds transfer program participants do not complete or mail Form PST-3.Additional Forms & Resources
- Form ST-1-X, Amended Sales & Use Tax Return | Instructions
- Form ST-2, Multiple Site Form (this form is not available on-line)
- Form ST-2-X, Amended Multiple Site Form
- Pub 104, Common Sales Tax Exemptions
- Create your own forms
Exemptions
Sales
The following examples of sales of tangible personal property are exempt from tax:- Sales to state, local, and federal governments
- Sales to not-for-profit organizations that are exclusively charitable, religious, or educational
- Sales of newspapers and magazines
- Sales of tangible personal property to interstate carriers for hire used as rolling stock (e.g., semitractor trailers, railroad cars)
- Sales of machinery and equipment that will be used primarily in manufacturing or assembling of tangible personal property for Wholesale or retail sale or lease and production agriculture
- Qualified sales of building materials that will be incorporated into real estate as part of a project for which a Certificate of Eligibility for Sales Tax Exemption has been issued by the enterprise zone administrator
- Qualifying purchases of tangible personal property used in a manufacturing or assembling process by businesses located in an enterprise zone and certified by the Department of Commerce and Community Affairs as qualifying to make these purchases because jobs will be created or retained
- Sales of legal tender, medallions, and gold bullion issued by qualifying governments
- Fuel used for international flights
- Certain second division motor vehicles and trailers if the Commercial Distribution Fee administered by the Secretary of State is paid.
Organizations
Qualified organizations, as determined by the department, are exempt from paying sales and use taxes in Illinois. Upon approval, we issue each organization a sales tax exemption number. The organization must give this number to a merchant in order to make purchases tax-free. Examples of exempt organizations:- State, local, and federal governments
- Not-for-profit organizations that are exclusively charitable, religious, or educational
- Certain senior citizen organizations
- County fair associations
- Not-for-profit organizations that are operated primarily for arts or cultural purposes
- Certain licensed day care centers
Examples
Examples of organizations that do not have to collect sales tax on their retail sales:- Elementary or secondary teacher-sponsored student organizations
- Not-for-profit organizations that are exclusively charitable, religious, or educational who make sales to their members primarily for the purposes of the selling organization (e.g., uniforms, insignia, and scouting equipment by Scout organizations to their members; bible sales by a church to its members)
- Certain sales by not-for-profit service organizations operated for the benefit of persons 65 years of age or older
Questions?
- Call us at: 1 800 732-8866 or 1 217 782-3336
- Call TDD: 1 800 544-5304
- Mail your ST-1 forms to:
Illinois Department of Revenue
Retailers Occupation Tax
Springfield, Illinois 62796-0001 - Mail your ST-1-X forms to:
Illinois Department of Revenue
P.O. Box 19034
Springfield, Illinois 62794-9034
