How to File Sales Tax in Illinois

If you’re selling digital services and products to customers in Illinois, then you might be liable for Illinois’s sales tax. We’ve drawn on our 10 years of experience in tax compliance to create this comprehensive guide, which covers how to file sales tax returns online and stay compliant with the state's regulations.

We’ve scoured the Illinois Department of Revenue (DOR) website to provide you with all the necessary information about sales tax for businesses in one convenient place.

How to file sales tax returns in Illinois

Sales and taxes should be reported and filed using US dollars. If you’ve made any transactions in Illinois in a different currency, be sure to convert those to USD using official currency exchange rates.

When to file and pay

The timing for filing your return depends on your average monthly sales tax liability, and the DOR will assign you a filing frequency (monthly, quarterly, or yearly) after you register for an Illinois sales tax permit. Businesses with smaller sales volumes are typically assigned less frequent filing periods, while larger businesses are asked to file more frequently.

Illinois sales tax returns and payments must be remitted at the same time; both have the same due date. The DOR requires all sales tax filing to be completed by the 20th of the month following the assigned filing period. Due dates falling on a weekend or holiday are adjusted to the following business day.

Illinois sales tax filing deadlines

Monthly filing due dates

Reports are due on the 20th of the month following the reporting month. For example, the January sales tax report is due February 20. If the 20th falls on a weekend or holiday, you have until the next business day.

| Month | Filing Deadline | |-----------|-------------------| | January | February 20 | | February | March 20 | | March | April 20 | | April | May 20 | | May | June 20 | | June | July 20 | | July | August 20 | | August | September 20 | | September | October 20 | | October | November 20 | | November | December 20 | | December | January 20 |

Quarterly filing due dates

Reports are due on the 20th of the month following the reporting period. If the 20th falls on a weekend or holiday, you have until the next business day.

| Quarter | Filing Deadline | |-----------|-------------------| | Q1 (January 1–March 31) | April 20 | | Q2 (April 1–June 30) | July 20 | | Q3 (July 1–September 30)| October 20 | | Q4 (October 1–December 31)| January 20 |

Yearly filing due dates

Reports for the previous year are due on January 20.

Important note: Zero returns

Even if you didn’t make any sales in Illinois during your reporting period, you must still file a "zero return." This follows the exact same process as a normal return, just with no tax liability to report. Failure to submit a zero return can result in penalties and interest charges.

How to prepare your Illinois sales tax return

Before you start working on your sales tax return, you'll need to collect all the sales information for your tax period. The DOR online tax return system will guide you, but generally, you'll need the following details:

Sales transactions

Every business needs to know how much it sold—both in gross sales and in taxable sales—and to whom the business sold it. You are also required to collect and pay sales tax for any personal property sold to residents of Illinois, with certain exceptions (e.g., if the buyer has a resale certificate or the item isn't considered taxable).

In addition to your gross Illinois sales (total sales revenue from buyers in Illinois, regardless of taxability), filing a sales tax return requires the following information:

• Total sales and income
• Total purchases and expenses
• Taxable sales by type: Different types of products are subject to different tax rules and amounts.
• Non-taxable sales by type: Examples include sales to resellers, non-taxable labor, and certain non-taxable foods.
• Deductions: This might include items such as delivery charges.
• Total collected sales tax: The total amount of sales tax you collected from customers during the filing period.

If a business has employees, an office, or a warehouse located in Illinois and is selling taxable goods and/or services, it must collect sales taxes, file returns, and pay the appropriate amount to the state.

How to complete and file an Illinois sales tax return

The final step is to file and remit tax. The DOR has an online filing system where you can enter your information to generate the return. Online filing with MyTaxIllinois is recommended. You can also file a paper version of form ST-1 if your annual liability is less than $20,000.

How to pay

Tax payments must be in US dollars and can be made directly at the time of filing. Once you’ve completed the return, you’ll remit the total calculated sales taxes.

Payment options include:

• Electronic bank transfer
• Credit card payment (if available through MyTaxIllinois)

Timely filing discount

As of April 2019, the DOR offers a discount of 1.75 percent of the tax paid, or $5 per calendar year, whichever is greater, for timely or early filing of sales and use tax returns.

Late filing penalties and interest

Hopefully, you won't need to worry about this section because you're filing and remitting Illinois sales tax on time. However, in the real world, mistakes happen.

If you miss a sales tax filing deadline, file your return as soon as possible. Failure to file returns and remit collected tax on time may result in penalties and interest charges, and the longer you wait to file, the greater the penalty and the greater the interest. For more information, refer to the DOR's section on penalties and interest.

If you miss an Illinois sales tax filing deadline due to unavoidable circumstances like weather or an accident, you might be eligible for an extension from the DOR. Be prepared to provide evidence to support your request. Furthermore, if you are considering buying a business, it's crucial to contact the DOR beforehand to check its sales and use tax standing. You will be responsible for any existing tax debts after the purchase is complete.

Getting third-party help with sales tax filing

While you can file directly with the DOR, manual filing can be time-consuming and difficult, especially for larger businesses. Outsourcing to experts like accountants, bookkeepers, or sales tax automation companies is common. They understand Illinois sales tax law and can help you navigate its complexities.

Quaderno offers a service to simplify your sales tax compliance. Besides generating detailed tax reports with all necessary data, Quaderno can handle the filing process for you. By connecting to your sales data, Quaderno manages the submission of your sales tax returns to the DOR, ensuring timely and accurate filing. This saves time and provides peace of mind.

For further reading that will help you stay compliant and successful as a remote seller, check out our Business Guide to Sales Tax in Illinois.

Sales tax filing in other states

• Arizona Sales Tax Filing Guide
• California Sales Tax Filing Guide
• Colorado Sales Tax Filing Guide
• Florida Sales Tax Filing Guide
• Georgia Sales Tax Filing Guide
• Massachusetts Sales Tax Filing Guide
• New Jersey Sales Tax Filing Guide
• New York Sales Tax Filing Guide
• North Carolina Sales Tax Filing Guide
• Pennsylvania Sales Tax Filing Guide
• Texas Sales Tax Filing Guide
• Virginia Sales Tax Filing Guide
• Washington Sales Tax Filing Guide