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Illinois Sales and Use Tax and Filing Frequency

Illinois first introduced a sales tax in 1932 at 2%. It later revised it to 3% in 1935, 4% in 1969, and 5% in 1984. The last time Illinois revised its sales tax was in 1990 when it raised it from 5% to 6.25%. In Illinois, the sales tax is actually an occupation, service, or use t/p> Sellers must collect a sales tax on tangible items sold, consumed, or used in Illinois. Sellers collect and remit the state and local sales tax to the Illinois Department of Revenue (IDOR).

Illinois Sales and Use Tax

State and Local Sales Tax

Illinois Residents also have to pay a local government sales tax of up to 4.75%, of which there are 897 different local governments in Illinois. That makes the sales tax in Illinois quite diverse. The average local sales tax is 1.57%, while the combined state and local sales tax average is 7.82%. However, the highest total sales tax a seller can pay in Illinois is 11%. Currently, that is in the city of River Grove. You can view the specific tax rates in Illinois here.

Illinois Use Tax

Where the seller had not collected sales tax on tangible property, such as when the items are bought out-of-state, the consumer has to pay a use tax. To do this, the Illinois residents have to file Form ST-44, Illinois Use Tax Return.

Illinois Sales Tax Structure

Illinois uses three different sales tax structures. The first one is general merchandise, the second is for the registered or titled items, and the third one is for medical appliances, drugs, and food.

Illinois Sales Tax on Special Goods

The sales tax rate for foods, medical appliances, and drugs is 1%. Items that fall under the general merchandise, and those that are registered or titled, attract a sales tax of 6.25%. The registered or titled items include mobile homes, watercraft, aircraft, motor vehicles, and ATVs. The general items include soft drinks and candy, hygiene and grooming products, repair parts or items used in the service industry, computer software, and prepared foods.

Sales Tax Exempted Goods

Buyers such as federal, state, and local governments are tax exempted. Educational, religious, and charitable organizations are tax exempt. Sales of newspapers and magazines, and motor vehicle sales to residents in states that exempt Illinois residents from the same, are also tax exempted. Here is a complete list of exempted items, buyers, and sellers.

How to File Sales Tax in Illinois

Annual Fling

If the sales tax is $600 or less, the tax must be filed annually. The tax is due by April 15th of the year following the end of the year that the sale was made.

Monthly Filing

However, if the tax liability exceeds $600, the tax is due monthly. The tax is due on the last day of the month that follows the month in which the sale occurred.

Quarterly Filing

If a retailer or service person’s sales tax liability is at least $20,000, they have to submit quarter-monthly payments. The due dates are the 7th, 15th, 22nd, and the last day of that particular month. The quarter-monthly payments should also be remitted through the electronic funds transfer (EFT) program. This condition applies if the sales tax owed is at least $20,000.

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