When starting a business in Illinois, there are several registrations to take care of. The most common is the Illinois sales tax permit, which is sometimes referred to as a retailer certificate, seller’s permit, sales tax license, sales and use tax number, or sales tax registration.
The sales tax permit is obtained through the Illinois Department of Revenue when applying for an Illinois Business Tax Number.
Keep reading to learn who needs a sales tax permit, what kinds of products and services are taxable, how to register, and what you need to do for reporting.
Related: Guide to starting a business in Illinois
Who needs a sales tax permit in Illinois?
A business must register as a retailer in Illinois when:
- A business has sales tax nexus. Nexus means having a physical presence in the state, such as having a physical location like a retail store or office or using a warehouse or fulfillment center to store inventory.
- Selling items at craft shows, fairs, seminars, conventions, etc. in Illinois
- An online business located in Illinois is selling taxable products to Illinois residents
- An out-of-state business (remote seller) who sells over $100,000 in physical goods or has over 200 transactions annually to residents in Illinois
More information on when a sales tax permit is needed is available in Illinois Publication 113.
What products and services are taxable in Illinois?
Physical Products
There are a few exceptions, but almost all physical products are taxable when sold at retail in Illinois. Common examples include:
- General merchandise like furniture, appliances, and clothing
- Titled or registered items like vehicles
- Qualifying food, prescriptions, and medical appliances
Certain manufacturing equipment is tax-exempt.
Digital Products
Digital products, with the exception of canned software (pre-made software), aren’t taxable.
Services
Most services aren’t taxable in Illinois, however, there are a few exceptions.
- Short-term lodging
- Automobile rentals
- Coin-operated amusement devices
How to register for a sales tax permit in Illinois
A sales tax permit can be obtained by registering through the MyTax Illinois website or by mailing Form REG-1 – Illinois Business Registration Application.
Information needed to register includes:
- Type of business entity: sole proprietorship, general partnership, corporation, Limited Liability Company (LLC)
- Business name
- Names and addresses of owners/officers/members
- Description of what products or services are being sold
- Business address
- Phone number
- North American Industry Classification System (NAICS) code
- Federal Employer Identification Number (FEIN) from the IRS, or owner’s Social Security Number (SSN) if a sole proprietorship with no employees
- Date business activities began or will begin
- Projected monthly sales
- Projected monthly taxable sales
- Employee information
Sales tax reporting
How is sales tax collected?
When a business sells a taxable product or service, the business charges the appropriate sales tax rate to the customer. This tax is collected by the company and then sends it to the Illinois Department of Revenue.
There are two ways to submit sales tax to the Illinois Department of Revenue. One is by filing online through MyTaxIllinois and the other is by mailing form ST-1. The ST-1 is only available to businesses with less than $20,000 in annual sales tax liability.
How much is the Illinois sales tax?
The sales tax rate that is charged varies depending on the address of the business if the purchase is made or shipped from a business located in the state. If the seller is based out of the state, the sales tax rate is based on the buyer’s address.
When are Illinois sales tax returns due?
The Department of Revenue will determine a filing frequency based on the expected volume of annual sales, which will be monthly, quarterly, or annually. Generally, a business selling over $30,000 annually in taxable sales will file monthly. The frequency is re-evaluated annually.
The due date for filings is the 20th day of the month following the reporting period unless the 20th falls on a weekend or federal holiday, which would move to the next business day.
Even if the business had no sales during the reporting period, a filing indicating no sales is still required.
Illinois Sales Tax Permit FAQs
How much is an Illinois sales tax permit?
There is no cost for a sales tax permit in Illinois.
How long does it take to get an Illinois sales tax permit?
Expect 2-3 business days to receive a sales tax permit when registering online through MyTaxIllinois or 2-3 weeks when applying by mail.
After registering, the business will receive an eight-digit number and a Registration Certificate that must be prominently displayed at its location.
How do I get a wholesale license in Illinois?
A wholesale license allows a business to purchase items to resell without paying state sales tax. The tax liability is passed from the distributor to the retailer, who will then charge sales tax to the end-user of the item.
Wholesalers and distributors will require a sales tax number and a completed Illinois Certificate of Resale (also referred to as a resale certificate, resale license, or sales tax exemption certificate) to document that the items being purchased are for resale.
Is a business license the same thing as a sales tax license?
No – A business license and a sales tax permit serve different purposes and are not the same.
A business license authorizes you to conduct business within a particular locality, ensuring compliance with local regulations. Conversely, a sales tax permit enables your business to legally collect sales tax on sales, which you then remit to the state government.
Generally, businesses require both a license and a permit to operate legally and handle taxes correctly.
Do you have to renew your Illinois sales tax permit?
The sales tax permit is a one-time registration, and no renewals are needed. Be mindful that if any information about the business changes, such as the mailing address, additional locations, or change in ownership, those changes need to be updated with the Department of Revenue.
Contact information for the Illinois Department of Revenue
If you have questions about the sales tax permit, the Illinois Department of Revenue can be contacted by calling 800-732-8866 or 217-782-3336.
Business owners can also call or visit a regional office. No appointment is necessary.
Chicago
James R. Thompson Center
Concourse Level
100 West Randolph Street
Chicago, Illinois 60601-3274
800 732-8866
217 782-3336
Des Plaines
Maine North Regional Building
9511 Harrison Street FA 203
Des Plaines, Illinois 60016-1563
847 294-4200
Fairview Heights
15 Executive Drive Business Center One, Suite 2
Fairview Heights, Illinois 62208-1331
618 624-6773
Marion
2309 W. Main Suite 114
Marion, Illinois 62959-1196
618 993-7650
Rockford
200 South Wyman Street
Rockford, Illinois 61101-1237
815 987-5210
Springfield
Willard Ice Building
101 West Jefferson
Springfield, Illinois 62702
800 732-8866
217 782-3336
