Illinois sales tax for small businesses: a short guide
Illinois sales tax is really two taxes, one on the seller and one on the buyer. Here is who collects, what the 2026 rates look like and the dates that matter, in plain English.
Prepared by Prem Tax and Accounting Corp. Last checked against official sources on October 29, 2026.
Illinois sales tax is two laws working together: the Retailers' Occupation Tax Act (35 ILCS 120) on the seller's receipts and the Use Tax Act (35 ILCS 105) on the buyer. The Illinois Department of Revenue (IDOR) runs both. It matters to sellers, lessors and buyers. We use the Brass Register Check to keep it straight. The official text is on the Illinois General Assembly website.
- The 2026 State rate is 6.25 percent, plus local and transit taxes.
- The State grocery tax ended 1 Jan 2026.
- Remote sellers are covered at $100,000 of Illinois receipts; the 200-transaction test ended 31 Dec 2025.
- Form ST-1 is due the 20th after the period. Late payment costs 2 percent, then 10 percent.
Who it covers
| Seller or buyer | Covered? | Note |
|---|---|---|
| Illinois retailer or lessor | Yes | Origin rate. Leasing most goods counts as retail since 1 Jan 2025. |
| Out-of-state seller with Illinois presence | Yes | Origin or destination rate, by sourcing. |
| Remote seller or marketplace facilitator | At $100,000 | Destination rate. |
| Buyer not charged Illinois tax | Owes use tax | 6.25 or 1 percent, less tax paid to another state. |
| Reseller | Not taxed | Needs a valid CRT-61 (or equivalent proof) and an active buyer account ID. |
The numbers
| Item | Amount or date | Year |
|---|---|---|
| State grocery rate | 1 percent through 2025; none from 1 Jan 2026 | 2026 |
| Transit tax after 0.25 point rise | Cook: 1.25 percent general, 1.50 percent groceries and drugs. DuPage, Kane, Lake, McHenry, Will: 1.00 percent | 1 Aug 2026 |
Source: IDOR rate file
Our checklist
The Brass Register Check has five questions.
- Registered: IDOR registration (Form REG-1) before the first sale or lease?
- Rate: Tax Rate Finder rate, rechecked each 1 Jan, 1 Jul and after one-off changes?
- Resale: each tax-free sale backed by a CRT-61 and a checked buyer account ID, kept at least 3.5 years?
- Returns: ST-1 filed and paid by the 20th?
- Use tax: untaxed business purchases reported on ST-44 (or ST-1 if registered)?
Mistakes people make
- Accepting a bare "it is for resale." IDOR wants evidence, and CRT-61 is a resale certificate, not an exemption certificate.
- Using an old rate after a 1 Jan, 1 Jul or 1 Aug change.
- Assuming the 200-transaction test still applies. It ended 31 Dec 2025, though an IDOR web page still shows it.
Call an attorney about a notice of tax liability, a Tax Tribunal or court petition, or a business sale. See Illinois income tax, state taxes and small business compliance.
Common questions
Is food taxed in Illinois now?
The State 1 percent ended 1 Jan 2026, but many places charge their own. Candy, soft drinks and prepared food stay at the general rate.
Do out-of-state sellers collect Illinois tax?
Yes, with a physical presence in Illinois or at $100,000 of Illinois receipts in the 12-month look-back. Marketplace facilitators use the same test.
Is a CRT-61 an exemption certificate?
No, it is a Certificate of Resale. Exempt buyers such as qualifying nonprofits use an IDOR-issued exemption number.
Official sources
- Illinois Department of Revenue: Sales and use taxes (Retailers' Occupation Tax)
- Illinois Department of Revenue: Form ST-1 instructions
- Illinois Department of Revenue: Sales tax rate machine-readable files
- Illinois Department of Revenue: Form CRT-61 instructions
- Illinois General Assembly: Retailers' Occupation Tax Act, section 2
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