Navigating Sales Tax in Illinois

This guide provides an overview of Sales Tax in Illinois, including applicable rates, registration requirements, compliance obligations, and filing deadlines. It is designed for businesses engaging in transactions within Illinois.

Last Updated: May 2025

$4

billion in combined sales tax revenue is collected annually in Chicago, more than any other U.S. city.

Illinois at a glance.

State

Illinois

Tax Rate Range

6.25% - 11%

Economic Nexus Threshold

$100,000 in retail sales or 200 separate transactions (Until January 2026)

Filling Deadlines

20th day of the month following the reporting period

Is SaaS Taxable?

Yes

Base Tax Rate:

6.25%

When should your
business collect Sales
Tax in Illinois?

Your business must begin collecting Illinois sales tax as soon as it establishes either physical or economic nexus. Once nexus is established, Illinois requires immediate registration and tax collection beginning with the next taxable sale.

Illinois physical sales tax nexus.

A business establishes physical nexus in Illinois when it maintains any in-state presence or uses representatives to conduct selling activities.

Sales tax physical nexus checklist for Illinois

The following conditions might establish a physical nexus in Illinois:

Having an office, distribution house, sales house, warehouse, or other place of business in Illinois

Having agents or representatives operating in Illinois, permanently or temporarily

Having affiliate or click-through referral contracts generating over $10,000 per year

Selling the same or similar product lines through Illinois affiliates

Any representative activity tied to sales under the authority of the retailer

Which services are taxable in Illinois?

SaaS and digital software services are taxable, as they qualify as tangible personal property for ROT purposes.

Digital goods such as electronic software are taxable under Illinois law.

Any service classified as ROT-taxable is subject to sales tax when it results in the transfer of taxable property.

Illinois taxes digital goods and SaaS because they are treated as tangible property or taxable services.

Illinois sales tax information:

Illinois uses destination-based sourcing for remote sales (effective Jan 1, 2025). Apply the 6.25% state rate + all applicable local rates for the customer’s delivery location. Total rates may reach up to 11%.

Illinois taxes tangible personal property, digital goods, SaaS, and any service or product treated as taxable property under Retailers’ Occupation Tax rules.

Register online through MyTax Illinois via the REG-1 process; approval is immediate, though full processing may take 2–4 days, and there is no registration fee. Paper Form REG-1 is also available for manual registration.

Once registered, charge the correct combined state and local rate based on destination sourcing (for remote sellers), include tax on invoices, and remit through MyTax Illinois. Electronic filing is required except in special cases.

Sales Tax return due dates explained.

Illinois assigns filing frequency (monthly, quarterly, or annual) based on prior-year tax liability. All sales tax returns are due on the 20th day of the month following the reporting period. Electronic filing through MyTax Illinois is required except in special cases. Businesses with high liability may also owe estimated prepayments. Amended returns may be filed via the MyTax portal.

FAQs

Is shipping taxable in Illinois?

Shipping is taxable when it is part of the selling price or not separately stated. If separately stated and optional, it is generally exempt.

Do marketplace facilitators need to collect Illinois tax?

Yes. Marketplaces must collect and remit tax on behalf of sellers, and marketplace sales are excluded from economic nexus calculations for individual retailers.

Can I claim sales tax exemptions in Illinois?

Yes. Certain buyers (e.g., nonprofits, resellers) may use exemption certificates. Illinois provides ST-1 forms and an online certificate verification tool to confirm exemption validity.

Related content.

US Sales Tax

12 May 2026

The Myth of Marketplace Protection: What Sellers Misunderstand

The Myth of Marketplace Protection: What Sellers Misunderstand When marketplace facilitator laws first came into effect across US states following the 2018 South Dakota v. Wayfair decision, many sellers breathed a sigh of relief. If platforms like Amazon, Shopify, or Etsy were now legally required to collect and remit sales tax on behalf of third-party sellers, […]

Read More

VAT Reclaim

6 May 2026

How the VAT IT and Brex Integration Streamlines VAT Reclaim

Most Finance Teams Using Brex Are Leaving VAT on the Table – Here’s Why For finance leaders managing spend across multiple countries, recoverable VAT is one of the most consistently overlooked sources of working capital. It sits within existing expense data: travel, supplier invoices, intercompany charges, events, and in most cases, it goes unclaimed. […]

Read More

e-Invoicing

5 May 2026

Continuous Transaction Controls (CTC): How Real-Time VAT Reporting Works in 2026

Continuous Transaction Controls (CTC): How Real-Time VAT Reporting Works in 2026 Continuous transaction controls are changing VAT compliance from a periodic reporting exercise into a real-time data exchange between businesses and tax authorities. Instead of issuing invoices, storing records, and reporting VAT weeks or months later, businesses in many markets now need to create, validate, […]

Read More

US Sales Tax

28 Apr 2026

Economic Nexus Explained (2026 Update): What European & UK Companies Need to Know After Their First Years Selling in the U.S.

Economic Nexus Explained (2026 Update): What European & UK Companies Need to Know After Their First Years Selling in the U.S. For many European and UK companies, economic nexus was a major concern when they first entered the U.S. market. In 2018–2020, the concept was still new, state rules were rapidly evolving, and companies felt […]

Read More

US Sales Tax

21 Apr 2026

6 Best US Sales Tax Compliance Solutions in 2026: An Honest Comparison

6 Best US Sales Tax Compliance Solutions in 2026: An Honest Comparison US Sales Tax compliance is one of the most complex indirect tax challenges businesses face today. With 50 states, thousands of local jurisdictions, and rules that vary by product, customer, and sales channel, managing compliance manually is no longer a viable option for […]

Read More

e-Invoicing

16 Apr 2026

What is Peppol and How Does It Affect Your Business When e-Invoicing

What is Peppol and How Does It Affect Your Business When e-Invoicing As governments accelerate digital tax compliance and mandate structured electronic invoicing, Peppol has become a central framework for how businesses exchange invoices securely and consistently. If your organisation operates across borders or supplies public sector entities, understanding the Peppol network, Peppol e-Invoicing, […]

Read More

e-Invoicing, US Sales Tax, VAT Compliance, VAT Reclaim

15 Apr 2026

Top Global VAT Solutions in 2026

Top Global VAT Solutions in 2026 As global tax regulations continue to evolve, businesses are facing increasing pressure to manage VAT across multiple jurisdictions. From compliance and reporting to reclaim and e-Invoicing, indirect tax obligations are becoming more complex, more digital and more closely monitored by tax authorities. Selecting the right global VAT […]

Read More

e-Invoicing

14 Apr 2026

9 Best e-Invoicing Compliance Solutions

9 Best e-Invoicing Compliance Solutions in 2026 As governments accelerate digital tax reform, e-invoicing is no longer a process improvement, it is a legal requirement. From real-time clearance models in Europe to continuous transaction controls emerging across the Middle East, businesses must now implement compliant, scalable and future-ready systems. Selecting from the best e-invoicing […]

Read More

e-Invoicing

14 Apr 2026

e-Invoicing Requirements for B2B Sellers: What You Need to Have in Place

e-Invoicing Requirements for B2B Sellers: What You Need to Have in Place As e-Invoicing mandates continue to expand across the globe, businesses can no longer afford to treat compliance as a future issue. For B2B sellers, understanding e-Invoicing requirements is essential to avoiding disruption, reducing risk, and keeping payments moving. In this guide, we break […]

Read More

VAT Compliance

9 Apr 2026

Quarterly VAT Return Dates: How to Stay Compliant All Year

Quarterly VAT Return Dates: How to Stay Compliant All Year For most finance teams, a new quarter doesn’t just mean new targets. It signals the start of another VAT reporting cycle, often accompanied by a last-minute rush to reconcile accounts and meet VAT return deadlines. This reactive approach creates unnecessary pressure, increases the risk of […]

Read More

Navigating Sales Tax in Illinois

This guide provides an overview of Sales Tax in Illinois, including applicable rates, registration requirements, compliance obligations, and filing deadlines. It is designed for businesses engaging in transactions within Illinois.

Last Updated: May 2025

$4

billion in combined sales tax revenue is collected annually in Chicago, more than any other U.S. city.

Illinois at a glance.

State

Illinois

Tax Rate Range

6.25% - 11%

Economic Nexus Threshold

$100,000 in retail sales or 200 separate transactions (Until January 2026)

Filling Deadlines

20th day of the month following the reporting period

Is SaaS Taxable?

Yes

Base Tax Rate:

6.25%

When should your
business collect Sales
Tax in Illinois?

Your business must begin collecting Illinois sales tax as soon as it establishes either physical or economic nexus. Once nexus is established, Illinois requires immediate registration and tax collection beginning with the next taxable sale.

Illinois physical sales tax nexus.

A business establishes physical nexus in Illinois when it maintains any in-state presence or uses representatives to conduct selling activities.

Sales tax physical nexus checklist for Illinois

The following conditions might establish a physical nexus in Illinois:

Having an office, distribution house, sales house, warehouse, or other place of business in Illinois

Having agents or representatives operating in Illinois, permanently or temporarily

Having affiliate or click-through referral contracts generating over $10,000 per year

Selling the same or similar product lines through Illinois affiliates

Any representative activity tied to sales under the authority of the retailer

Which services are taxable in Illinois?

Illinois taxes digital goods and SaaS because they are treated as tangible property or taxable services.

SaaS and digital software services are taxable, as they qualify as tangible personal property for ROT purposes.

Digital goods such as electronic software are taxable under Illinois law.

Any service classified as ROT-taxable is subject to sales tax when it results in the transfer of taxable property.

Illinois sales tax information:

Illinois uses destination-based sourcing for remote sales (effective Jan 1, 2025). Apply the 6.25% state rate + all applicable local rates for the customer’s delivery location. Total rates may reach up to 11%.

Illinois taxes tangible personal property, digital goods, SaaS, and any service or product treated as taxable property under Retailers’ Occupation Tax rules.

Register online through MyTax Illinois via the REG-1 process; approval is immediate, though full processing may take 2–4 days, and there is no registration fee. Paper Form REG-1 is also available for manual registration.

Once registered, charge the correct combined state and local rate based on destination sourcing (for remote sellers), include tax on invoices, and remit through MyTax Illinois. Electronic filing is required except in special cases.

Sales Tax return due dates explained.

Illinois assigns filing frequency (monthly, quarterly, or annual) based on prior-year tax liability. All sales tax returns are due on the 20th day of the month following the reporting period. Electronic filing through MyTax Illinois is required except in special cases. Businesses with high liability may also owe estimated prepayments. Amended returns may be filed via the MyTax portal.

FAQs

Is shipping taxable in Illinois?

Shipping is taxable when it is part of the selling price or not separately stated. If separately stated and optional, it is generally exempt.

Do marketplace facilitators need to collect Illinois tax?

Yes. Marketplaces must collect and remit tax on behalf of sellers, and marketplace sales are excluded from economic nexus calculations for individual retailers.

Can I claim sales tax exemptions in Illinois?

Yes. Certain buyers (e.g., nonprofits, resellers) may use exemption certificates. Illinois provides ST-1 forms and an online certificate verification tool to confirm exemption validity.

Related content.

US Sales Tax

12 May 2026

The Myth of Marketplace Protection: What Sellers Misunderstand

The Myth of Marketplace Protection: What Sellers Misunderstand When marketplace facilitator laws first came into effect across US states following the 2018 South Dakota v. Wayfair decision, many sellers breathed a sigh of relief. If platforms like Amazon, Shopify, or Etsy were now legally required to collect and remit sales tax on behalf of third-party sellers, […]

Read More

VAT Reclaim

6 May 2026

How the VAT IT and Brex Integration Streamlines VAT Reclaim

Most Finance Teams Using Brex Are Leaving VAT on the Table – Here’s Why For finance leaders managing spend across multiple countries, recoverable VAT is one of the most consistently overlooked sources of working capital. It sits within existing expense data: travel, supplier invoices, intercompany charges, events, and in most cases, it goes unclaimed. […]

Read More

e-Invoicing

5 May 2026

Continuous Transaction Controls (CTC): How Real-Time VAT Reporting Works in 2026

Continuous Transaction Controls (CTC): How Real-Time VAT Reporting Works in 2026 Continuous transaction controls are changing VAT compliance from a periodic reporting exercise into a real-time data exchange between businesses and tax authorities. Instead of issuing invoices, storing records, and reporting VAT weeks or months later, businesses in many markets now need to create, validate, […]

Read More

US Sales Tax

28 Apr 2026

Economic Nexus Explained (2026 Update): What European & UK Companies Need to Know After Their First Years Selling in the U.S.

Economic Nexus Explained (2026 Update): What European & UK Companies Need to Know After Their First Years Selling in the U.S. For many European and UK companies, economic nexus was a major concern when they first entered the U.S. market. In 2018–2020, the concept was still new, state rules were rapidly evolving, and companies felt […]

Read More

US Sales Tax

21 Apr 2026

6 Best US Sales Tax Compliance Solutions in 2026: An Honest Comparison

6 Best US Sales Tax Compliance Solutions in 2026: An Honest Comparison US Sales Tax compliance is one of the most complex indirect tax challenges businesses face today. With 50 states, thousands of local jurisdictions, and rules that vary by product, customer, and sales channel, managing compliance manually is no longer a viable option for […]

Read More

e-Invoicing

16 Apr 2026

What is Peppol and How Does It Affect Your Business When e-Invoicing

What is Peppol and How Does It Affect Your Business When e-Invoicing As governments accelerate digital tax compliance and mandate structured electronic invoicing, Peppol has become a central framework for how businesses exchange invoices securely and consistently. If your organisation operates across borders or supplies public sector entities, understanding the Peppol network, Peppol e-Invoicing, […]

Read More

e-Invoicing, US Sales Tax, VAT Compliance, VAT Reclaim

15 Apr 2026

Top Global VAT Solutions in 2026

Top Global VAT Solutions in 2026 As global tax regulations continue to evolve, businesses are facing increasing pressure to manage VAT across multiple jurisdictions. From compliance and reporting to reclaim and e-Invoicing, indirect tax obligations are becoming more complex, more digital and more closely monitored by tax authorities. Selecting the right global VAT […]

Read More

e-Invoicing

14 Apr 2026

9 Best e-Invoicing Compliance Solutions

9 Best e-Invoicing Compliance Solutions in 2026 As governments accelerate digital tax reform, e-invoicing is no longer a process improvement, it is a legal requirement. From real-time clearance models in Europe to continuous transaction controls emerging across the Middle East, businesses must now implement compliant, scalable and future-ready systems. Selecting from the best e-invoicing […]

Read More

e-Invoicing

14 Apr 2026

e-Invoicing Requirements for B2B Sellers: What You Need to Have in Place

e-Invoicing Requirements for B2B Sellers: What You Need to Have in Place As e-Invoicing mandates continue to expand across the globe, businesses can no longer afford to treat compliance as a future issue. For B2B sellers, understanding e-Invoicing requirements is essential to avoiding disruption, reducing risk, and keeping payments moving. In this guide, we break […]

Read More

VAT Compliance

9 Apr 2026

Quarterly VAT Return Dates: How to Stay Compliant All Year

Quarterly VAT Return Dates: How to Stay Compliant All Year For most finance teams, a new quarter doesn’t just mean new targets. It signals the start of another VAT reporting cycle, often accompanied by a last-minute rush to reconcile accounts and meet VAT return deadlines. This reactive approach creates unnecessary pressure, increases the risk of […]

Read More

Foreign VAT

Comprehensive VAT

Global e-invoicing Solutions

VAT Reclaim

Latest Blog

Latest Industry

Latest Blog

Tools

Upcoming Events

Our Partners

Technology-Centered, Expert-Led Indirect Tax Solutions for Businesses.

Navigating Sales Tax in Illinois

$4

State

Illinois

Tax Rate Range

6.25% - 11%

Economic Nexus Threshold

$100,000 in retail sales or 200 separate transactions (Until January 2026)

Filling Deadlines

20th day of the month following the reporting period

Is SaaS Taxable?

Yes

Base Tax Rate:

6.25%

When should yourbusiness collect SalesTax in Illinois?

Your business must begin collecting Illinois sales tax as soon as it establishes either physical or economic nexus. Once nexus is established, Illinois requires immediate registration and tax collection beginning with the next taxable sale.

Illinois physical sales tax nexus.

A business establishes physical nexus in Illinois when it maintains any in-state presence or uses representatives to conduct selling activities.

Sales tax physical nexus checklist for Illinois

Which services are taxable in Illinois?

Illinois taxes tangible personal property, digital goods, SaaS, and any service or product treated as taxable property under Retailers’ Occupation Tax rules.

FAQs

Related content.

The Myth of Marketplace Protection: What Sellers Misunderstand

How the VAT IT and Brex Integration Streamlines VAT Reclaim

Continuous Transaction Controls (CTC): How Real-Time VAT Reporting Works in 2026

Economic Nexus Explained (2026 Update): What European & UK Companies Need to Know After Their First Years Selling in the U.S.

6 Best US Sales Tax Compliance Solutions in 2026: An Honest Comparison

What is Peppol and How Does It Affect Your Business When e-Invoicing

Top Global VAT Solutions in 2026

9 Best e-Invoicing Compliance Solutions

e-Invoicing Requirements for B2B Sellers: What You Need to Have in Place

Quarterly VAT Return Dates: How to Stay Compliant All Year

Navigating Sales Tax in Illinois

$4

State

Illinois

Tax Rate Range

6.25% - 11%

Economic Nexus Threshold

$100,000 in retail sales or 200 separate transactions (Until January 2026)

Filling Deadlines

20th day of the month following the reporting period

Is SaaS Taxable?

Yes

Base Tax Rate:

6.25%

When should yourbusiness collect SalesTax in Illinois?

Your business must begin collecting Illinois sales tax as soon as it establishes either physical or economic nexus. Once nexus is established, Illinois requires immediate registration and tax collection beginning with the next taxable sale.

Illinois physical sales tax nexus.

A business establishes physical nexus in Illinois when it maintains any in-state presence or uses representatives to conduct selling activities.

Sales tax physical nexus checklist for Illinois

The following conditions might establish a physical nexus in Illinois:

Which services are taxable in Illinois?

Illinois taxes digital goods and SaaS because they are treated as tangible property or taxable services.

Illinois taxes tangible personal property, digital goods, SaaS, and any service or product treated as taxable property under Retailers’ Occupation Tax rules.

FAQs

Related content.

The Myth of Marketplace Protection: What Sellers Misunderstand

How the VAT IT and Brex Integration Streamlines VAT Reclaim

Continuous Transaction Controls (CTC): How Real-Time VAT Reporting Works in 2026

Economic Nexus Explained (2026 Update): What European & UK Companies Need to Know After Their First Years Selling in the U.S.

6 Best US Sales Tax Compliance Solutions in 2026: An Honest Comparison

What is Peppol and How Does It Affect Your Business When e-Invoicing

Top Global VAT Solutions in 2026

9 Best e-Invoicing Compliance Solutions

e-Invoicing Requirements for B2B Sellers: What You Need to Have in Place

Quarterly VAT Return Dates: How to Stay Compliant All Year

Newsletter

When should your
business collect Sales
Tax in Illinois?

When should your
business collect Sales
Tax in Illinois?