FY 2025-04, Retailers’ Discount for Certain Tax Returns Capped at $1,000 Per Month

Taxpayers may claim a maximum discount of $1,000 per month for each of the following periodic returns:

• Form ST-1, Sales and Use Tax and E911 Surcharge Return (Line 10)¹
• Form ST-70, Aviation Fuel Sales and Use Tax Return
• Form CD-1, Cannabis Dispensary Tax Return (Sales and Use Tax portion)
• Form LSE-1, Tax Return for Vehicle Leasing Companies
• Form ST-201, Rental Purchase Agreement Occupation Tax Return
• Form ART-1, Automobile Renting Occupation and Use Tax Return
• Form CMFT-1, County Motor Fuel Tax Return
• Form MMFT-1, Municipal Motor Fuel Tax Return

For the following transaction returns (e.g., motor vehicles, trailers, watercraft, aircraft), taxpayers may claim a maximum discount amount of $1,000 per month:

Form ST-556, Sales Tax Transaction Return and Form ST-556-LSE, Transaction Return for Leases ($1,000 per month combined)

Note: For all amended periodic and transaction returns, if the amount of tax due is increased, the discount may still not exceed $1,000 per month and is allowed only if the increased tax reported was paid by the due date of the original return.

¹  The E911 Surcharge discount on Schedule B of Form ST-1 is subject to a separate maximum discount amount of $1,000 per month. The ITAC Assessment discount on Schedule B of Form ST-1 must be calculated separately and is not subject to a cap.

The maximum allowable discount of $1,000 per month is effective for returns due on or after January 1, 2025. This includes returns for the December 2024 liability period.

Yes. Quarterly and annual filers are also subject to the $1,000 per month discount cap.

Retailers should continue to calculate the discount using the appropriate discount rate for the tax, as indicated in the return instructions. However, if the calculated amount of discount is more than $1,000 per month for the return filing period, the taxpayer will only be granted a discount amount of $1,000 per month. See the example below.

If a taxpayer claims a discount amount, but IDOR subsequently determines that all or any part of the discount taken was not actually allowed the taxpayer, the taxpayer’s discount will be reduced and the taxpayer will be liable for penalties and interest on the difference.

If you file electronically using MyTax Illinois at mytax.illinois.gov, the discount will be calculated for you.

Example:

Taxpayer A is a retailer that sells motor fuel and is registered to file monthly Forms ST-1 and MMFT-1. For the January 2025 reporting period, the taxpayer is reporting $100,000 in tax due on Form ST-1 and $70,000 tax due on Form MMFT-1. The taxpayer is filing the returns and paying the taxes due before their due dates and is entitled to calculate a discount on these returns.

• The taxpayer multiplies the $100,000 tax due on Form ST-1 by 1.75% (.0175) and gets the total $1,750, which exceeds the maximum discount allowed on this return for this reporting period. The taxpayer cannot enter an amount exceeding $1,000 on Line 10 of Form ST-1.
• The taxpayer multiplies the $70,000 tax due on Form MMFT-1 by 1.75% (.0175) and gets the total $1,225, which is more than the maximum discount allowed on this return for this reporting period. The taxpayer cannot enter an amount exceeding $1,000 on Line 8 of Form MMFT-1.

As with the other returns, these changes impact transaction returns (i.e., Forms ST-556 and ST-556-LSE). The $1,000 monthly cap applies to vehicle sales with a delivery date on or after December 12, 2024, for the December liability period which corresponds to returns due on or after January 1, 2025.

IDOR will issue additional guidance with regard to the administration of the discount that can be claimed on transaction returns.