How to Register for a Sales Tax Permit in Illinois

Most businesses starting in Illinois selling a product or offering certain services will need to register for a sales tax permit. This is commonly referred to as a 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 as a part of applying for an Illinois Business Tax Number.

Check out the rest of this guide to determine who needs a sales tax permit, what products and services are taxable, how to register for a permit, and reporting requirements.

Also See: 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 selling to Illinois residents and one of the following:
- Making total sales of tangible personal property to Illinois residents is $100,000 or more; or
- Shipping 200 or more transactions of tangible personal property to Illinois residents.

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.

Labor, in most cases, isn’t taxable in Illinois. For instance, let’s say you broke the screen of your cell phone and take it to a cell phone repair shop to have it fixed. Sales tax would be added to the selling price of the new screen and any additional parts to fix the phone. The labor to replace the screen isn’t taxable. However, a business that makes furniture will indirectly have a sales tax on labor. In this instance, let’s say this business is building a dining room table for a customer. Through labor, the pieces of wood are shaped, sanded, and painted to build this piece of furniture. While the labor isn’t directly taxable, sales tax is charged to the final selling price of the table.

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

A list of common sales tax exemptions is found on the Illinois Department of Revenue’s website.

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 in Form REG-1 – Illinois Business Registration Application.

Information needed to register includes:

Type of business entity: Sole Proprietorship, 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.

In addition to the statewide tax, there are additional sales taxes that may be added by cities and municipalities. The Illinois Department of Revenue has a Sales Tax Rate Finder to determine how much sales tax to charge.

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 20^th 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 is still required indicating no sales.

Common Sales Tax Permit Questions

How much is a sales tax permit in Illinois?

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 will need to be prominently displayed at their 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 the items being purchased are for resale.

Is a business license the same thing as a sales tax license?

In addition to registering for a sales tax permit, there may be other business licenses needed before starting a business in Illinois.

Learn what business licenses are needed in Illinois.

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.