Step 7 - Other Taxes

Household employment tax

Enter the amount of Illinois Income Tax you withheld from a household employee. See Publication 121, Illinois Income Tax Withholding for  Household Employees, for details on how to figure the amount to withhold and report.

Enter the amount of Illinois Use Tax you owe. Use the Use Tax (UT) Worksheet or Use Tax (UT) Table to determine your use tax. You must make an entry on Line 21 (enter “zero” if you are not paying use tax on Form IL-1040).

Illinois Use Tax is a form of sales tax that you, as the purchaser, owe on items that you buy for use in Illinois. If the seller does not collect this tax from you, you must pay the tax to the Illinois Department of Revenue (IDOR). The most common purchases on which the seller does not collect Illinois Use Tax are those made through the internet, from a mail order catalog, or when traveling outside Illinois.

You must pay Illinois Use Tax to IDOR if

• the items you bought are taxable in Illinois,
• you used or consumed these items in Illinois, and
• when you purchased the items you either 
  • did not pay any sales tax to the seller, or 
  • paid sales tax at less than Illinois’ Use Tax rates of 6.25 percent for general merchandise and 1 percent for food and drugs.

For example, if you purchased

• a computer over the internet for use in Illinois and paid no sales tax, you owe 6.25 percent Illinois Use Tax.
• jewelry while vacationing in Georgia upon which you paid 4 percent sales tax and which you brought back to Illinois, you will owe Illinois Use Tax on the 2.25 percent difference in tax rates.
• cheese by mail order from a company in Wisconsin and paid no sales tax, you owe 1 percent Illinois Use Tax.

To determine the Illinois Use Tax you owe, check your records to see if you were charged tax on internet, mail order, or other out-of-state purchases and use the UT Worksheet to calculate your tax.

If your records are incomplete and you had

• major purchases, add the actual cost of your major purchases to the estimated cost of any other purchases you made during the year. Enter the total on Lines 1a or 2a of the UT Worksheet to calculate the use tax you owe.
• no major purchases, use the UT Table to help you estimate the use tax you owe.

Enter the Illinois Use Tax from the UT Worksheet or UT Table on Form IL-1040, Line 21.

If you had no major purchases and you do not have receipts to figure your purchases, use this table to estimate your annual Illinois Use Tax liability.

Compassionate Use of Medical Cannabis Program Act and sale of assets by gaming licensee surcharges

Organization registrant means a corporation, partnership, trust, limited liability company (LLC), or other organization, that holds either a medical cannabis cultivation center registration issued by the Illinois Department of Agriculture or a medical cannabis dispensary registration issued by the Illinois Department of Financial and Professional Regulation.

Transactions subject to the surcharge means sales and exchanges of

• capital assets,
• depreciable business property,
• real property used in the trade or business, and
• Section 197 intangibles

of an organization registrant.

For each taxable year beginning or ending during the Compassionate Use of Medical Cannabis Program, a surcharge is imposed on all taxpayers on income arising from the transactions subject to the surcharge of an organization registrant under the Compassionate Use of Medical Cannabis Program Act.

The amount of the surcharge is equal to the amount of federal income tax liability for the taxable year attributable to the transactions subject to the surcharge.

The surcharge is imposed on any taxpayer who incurs a federal income tax liability on the income realized on a “transaction subject to the surcharge,” including individuals and other taxpayers who are not themselves the “organization registrant” that engaged in the transaction.

A line has been included on Schedule K-1-P, Partner’s or Shareholder’s Share of Income, Deductions, Credits, and Recapture, and Schedule K-1-T, Beneficiary’s Share of Income and Deductions, to identify the amount of federal income attributable to transactions subject to the surcharge that was passed through to you on federal Schedule K-1.

Gaming licensee means an organization licensee under the Illinois Horse Racing Act of 1975 and/or an organization gaming licensee under the Illinois Gambling Act.

Transactions subject to the surcharge means income arising from sales and exchanges of

• capital assets,
• depreciable business property,
• real property used in the trade or business, and
• Section 197 intangibles

of a gaming licensee.

For each taxable year beginning in 2019 through 2027, the amount of the surcharge is equal to the amount of federal income tax liability attributable to those sales and exchanges.

The surcharge is imposed on any taxpayer who incurs a federal income tax liability on the income realized on a “transaction subject to the surcharge,” including individuals and other taxpayers who are not themselves the “organization licensee” that engaged in the transaction.

The surcharge imposed shall not apply if

• the organization gaming license, organization license, or racetrack property is transferred as a result of any of the following:
  • bankruptcy, a receivership, or a debt adjustment initiated by or against the initial licensee or the substantial owners of the initial licensee;cancellation, revocation, or termination of any such license by the Illinois Gaming Board or the Illinois Racing Board;
  • a determination by the Illinois Gaming Board that transfer of the license is in the best interests of Illinois gaming;
  • the death of an owner of the equity interest in a licensee;
  • the acquisition of a controlling interest in the stock or substantially all of the assets of a publicly traded company;
  • a transfer by a parent company to a wholly owned subsidiary; or
  • the transfer or sale to or by one person to another person where both persons were initial owners of the license when the license was issued; or
• the controlling interest in the organization gaming license, organization license, or racetrack property is transferred in a transaction to lineal descendants in which no gain or loss is recognized or as a result of a transaction in accordance with Section 351 of the Internal Revenue Code in which no gain or loss is recognized; or
• live horse racing was not conducted in 2010 at a racetrack located within 3 miles of the Mississippi River under a license issued pursuant to the Illinois Horse Racing Act of 1975. 

The transfer of an organization gaming license, organization license, or racetrack property by a person other than the initial licensee to receive the organization gaming license is not subject to a surcharge.

A line has been included on Schedule K-1-P, Partner’s or Shareholder’s Share of Income, Deductions, Credits, and Recapture, and Schedule K-1-T, Beneficiary’s Share of Income and Deductions, to identify the amount of federal income attributable to transactions subject to the surcharge that was passed through to you on federal Schedule K-1.

If either surcharge applies to you, complete the Surcharge Worksheet.