Pub-113, Requirements for Retailers Who File Form ST-1

1. On what sales must I collect and pay Sales and Use Tax?
2. What are some common types of sales that are exempt from Sales and Use Tax?
3. What factors determine the rate that applies to the sales I make?
4. How do I know what rate to charge?
5. What taxes are included in the tax rate?
6. What taxes are not included in the taxable selling price when determining sales and use tax?
7. Where can I get a list of sales tax rates?
8. What is Illinois Use Tax?
9. When does an Illinois retailer owe use tax on its purchases and how is it reported?
10. What is the Prepaid Wireless E911 Surcharge?
11. What is prepaid wireless telecommunications service?
12. When must I collect and pay the surcharge and how is it reported?
13. What E911 Surcharge rate will I collect?
14. How am I notified of E911 Surcharge rate changes?
15. What is the ITAC Assessment?
16. When must I collect and pay the ITAC Assessment and how is it reported?
17. What ITAC Assessment rate will I collect?
18. How am I notified of ITAC Assessment rate changes?
19. What form must I use to report Sales and Use Tax, E911 Surcharge, and the ITAC Assessment?
20. How do I file if I have more than one location?
21. Must I file Form ST-1 even if I have no sales or purchases to report?
22. When is my return and payment due?
23. Is there an incentive for paying the tax, E911 Surcharge, or ITAC I have collected on time?
24. How do I file my return?
25. What if I do not file and pay by the due date?
26. Can I pay electronically?
27. What if I collect tax, E911 Surcharge, or ITAC at a higher rate than I am required to collect?
28. What if I make a mistake on my return?

As a retailer, you must collect and pay tax on all receipts from sales you make of tangible personal property for use or consumption unless the sales are exempt from tax by law.

You must keep documentation in your records to support every exempt sale you make.

Listed below are some of the most common sales that are exempt from Sales and Use Tax:

• resale;
• interstate commerce;
• manufacturing machinery and equipment;
• graphic arts machinery and equipment;
• supplemental nutrition assistance program or SNAP (formerly called food stamps);
• enterprise zone;
• high impact business;
• river edge redevelopment zone building materials;
• exempt organizations; and
• newspapers and magazines

For more information, see Publication 104, Common Sales Tax Exemptions.

Generally, it is the location of your Illinois business from which you make sales, or, if you are a multiple location filer, the location from which the sale is made determines the rate of tax. The rate of sales tax that applies to retail sales made within Illinois varies based on the location of the sale.

Out-of-state retailers maintaining a place of business in Illinois collect and remit use tax on tangible personal property sold at retail and shipped from an out-of-state location. Illinois imposes a State Use Tax at the rate of 6.25 percent (.0625) for general merchandise and 1 percent (.01) for qualifying food, drugs, and medical appliances. If an out-of-state retailer maintaining a place of business in Illinois ships a product from an Illinois location (warehouse, distribution center, etc.), the transaction is subject to Retailers’ Occupation Tax and any local occupation taxes administered by IDOR rather than use tax, and the rate of Retailers’ Occupation Tax and any local occupation taxes are determined based on the location the product is shipped from.

Beginning January 1, 2021,

• remote retailers meeting either of the thresholds are required to remit Retailers’ Occupation Tax and any local occupation taxes administered by IDOR in effect at the location to which the tangible personal property is shipped or delivered or at which possession is taken by the purchaser;
• marketplace facilitators meeting either of the thresholds are required to remit Retailers’ Occupation Tax and any local occupation taxes administered by IDOR on all sales made on the marketplace on behalf of marketplace sellers, including Illinois brick and mortar marketplace sellers, in effect at the location to which the tangible personal property is shipped or delivered or at which possession is taken by the purchaser;
• marketplace facilitators meeting either of the thresholds making sales on their own behalf from inventory located in Illinois are required to remit Retailers’ Occupation Tax and any local occupation taxes administered by IDOR in effect at the location of the inventory from which the tangible personal property was shipped;
• marketplace facilitators meeting either of the thresholds making sales on their own behalf from inventory located outside of the state are required to remit Retailers’ Occupation Tax and any local occupation taxes administered by IDOR in effect at the location to which the tangible personal property is shipped or delivered or at which possession is taken by the purchaser;
• out-of-state retailers maintaining a place of business in Illinois that ship products from inventory located in Illinois are required to remit Retailers’ Occupation Tax and any local occupation taxes administered by IDOR in effect at the location of the inventory from which the tangible personal property was shipped; and
• Illinois brick and mortar retailers making sales outside of the marketplace from an Illinois location are required to remit Retailers’ Occupation Tax and any local occupation taxes administered by IDOR in effect at the location at which the sales are made.

Taxpayers electronically filing Form ST-1, Sales and Use Tax and E911 Surcharge Return, using MyTax Illinois will have the rates populated for them based on the addresses where they make retail sales.

If you receive a paper return, the rate will be preprinted, and if you make taxable sales from more than one location, the rate for each location will be printed on your Form ST-2, Multiple Site Form.

If the rate is not shown, refer to the Tax Rate Database at tax.illinois.gov to verify your rate; call us at 1 800 732-8866 or 217 782-3336; or call the TDD-telecommunications device for the deaf at 1 800 544‑5304.

If you sell general merchandise, your tax rate consists of

• the statewide general merchandise tax rate of 6.25 percent (.0625), plus
• any locally imposed and IDOR-collected taxes on general merchandise.

If you sell “qualifying” food, drugs, and medical appliances, your tax rate consists of

• the statewide food, drugs, and medical appliances tax rate of 1 percent (.01), plus
• any locally imposed and IDOR-collected taxes on food, drugs, and medical appliances.

See 86 Ill. Adm. Code Sections 130.310 and 130.311 for more information about what qualifies as food, drugs, and medical appliances.

Depending on the location of your business, the following additional locally imposed and IDOR-collected taxes may be included in your tax rate:

• Regional Transportation Authority (RTA) tax rate - taxpayers in Cook, DuPage, Kane, Lake, McHenry, and Will counties
• Metro-East Mass Transit District (MED) tax rate - taxpayers in Madison and St. Clair counties
• DuPage County Water Commission (CWCT) tax rate - certain taxpayers in Cook, DuPage, and Will counties
  • CWCT applies to general merchandise only (Expired May 31, 2016).
• Home-rule, non-home rule, County School Facility, County Public Safety/Public Facilities/Transportation Sales Tax, Metro-East, Park and Recreation District Tax rate - taxpayers within certain units of government.
  • Home-rule, non-home-rule, County School Facility/County Public Safety/Public Facilities/Mental Health/Substance Abuse/Transportation Sales Tax, and Metro-East Park and Recreation District taxes do not apply to the sales of food, drugs, and medical appliances or items that must be titled and/or registered.

Local governments may also impose taxes on either general merchandise or food, drugs, and medical appliances that they administer themselves using a form of their own.

You should not include in the selling price subject to sales tax any tax reported and paid on Form CMFT-1 under the County Motor Fuel Tax Law (55 ILCS 5/5-1035.1) for motor fuel sold in DuPage, Kane, Lake, McHenry, or Will County and tax reported and paid on Form MMFT-1 under the Municipal Motor Fuel Tax Law (65 ILCS 5/8-11-2.3) for motor fuel sold in a municipality in Cook County.

For a complete list of all sales tax rates, go to the Tax Rate Database at tax.Illinois.gov.

Use tax is a form of sales tax designed to distribute the tax burden fairly among consumers and ensure fair competition between in-state and out-of-state businesses.

For Form ST-1 filers, Illinois law requires you to pay Illinois Use Tax on purchases you made for use or consumption in Illinois and on which you did not pay Illinois Retailers’ Occupation Tax (sales or use tax) to the seller. You must report use tax on your Form ST-1.

Businesses that purchase items tax free for use or consumption in Illinois should pay use tax using the Form ST-1 that has a reporting period corresponding to the purchase date of the items for which use tax is due.

Businesses that purchase items tax free for resale and later remove these items from inventory for use or consumption in Illinois should pay use tax using the Form ST-1 that has a reporting period corresponding to the date the item was removed from inventory. The Illinois Use Tax rate is 6.25 (.0625) percent for general merchandise and 1 percent (.01) for food, drugs, and medical appliances. If you paid the correct tax to another state but the tax you paid is lower than the Illinois rate, you must pay us the difference.

If you make retail sales of prepaid wireless telecommunications service, you must collect and remit the Prepaid Wireless E911 Surcharge unless the sales are exempt from the E911 Surcharge by law. This charge is imposed on the consumer and you the retailer must collect and remit the surcharge. The Prepaid Wireless E911 Surcharge became effective January 1, 2012.

Prepaid wireless telecommunications service is a service that is paid for in advance and is sold in predetermined units or dollars. As the predetermined units are used, the amount remaining available for use declines in a known amount. Examples include prepaid calling cards and minutes added to “pay-as-you-go” phones.

You are required to collect and remit the E911 Surcharge only on the portion of the receipt that is from the retail transaction of prepaid wireless telecommunications service. Receipts from sales of other tangible personal property are not subject to the surcharge. If you sell services subject to the E911 Surcharge that are bundled with other tangible personal property, but you do not separate those services from the other items on the receipt or invoice, or if you do not otherwise document the separation in your records, the entire sale is subject to the E911 Surcharge. Retailers must disclose the surcharge by separately stating the figure on the receipt or invoice or through other documentation.

Retailers’ records must clearly identify the surcharge for retail transactions. You must report the E911 Surcharge on Form ST-1 for each reporting period when a retail transaction of prepaid wireless telecommunications service takes place.

The E911 rate can be found in the Tax Rate Database on our website at tax.Illinois.gov under “Other Miscellaneous Taxes, Fees, and Surcharges.

IDOR posts E911 Surcharge rate changes on our website at tax.Illinois.gov no later than 30 days in advance of the effective date of the change.

The ITAC Assessment is a competitively neutral amount (as established by the Illinois Commerce Commission) charged or assessed to subscribers of wireless telecommunications service and Interconnected VoIP service, as well as consumers of prepaid wireless telecommunications service.

The ITAC Assessment allows the Commission to administer its program to assist persons having a hearing or speech disability to communicate with persons of normal hearing.

Retailers must collect the ITAC Assessment when making sales at retail of prepaid wireless telecommunications service. Retailers of prepaid wireless telecommunications service shall collect and remit the ITAC Assessment to IDOR in the same manner in which they collect and remit the Prepaid Wireless E911 Surcharge. The ITAC Assessment also is reported with the Prepaid Wireless E911 Surcharge on Schedule B of Form ST-1.

The ITAC Assessment rate for can be found in the Tax Rate Database on our website at tax.Illinois.gov under “Other Miscellaneous Taxes, Fees, and Surcharges.

IDOR posts ITAC Assessment rate changes on our website at tax.Illinois.gov no later than 30 days in advance of the effective date of the change.

All retailers must file Form ST-1, Sales and Use Tax and E911 Surcharge Return, for each reporting period and pay the tax, E911 Surcharge, and ITAC Assessment collected from retail sales made and any use tax owed for purchases made. If you are registered as a reseller, you are not required to file Form ST-1.

If you make retail sales from more than one location, you will be registered as a multiple location filer. You must complete and file Form ST-2, Multiple Site Form, to report specific tax information for each location. If you are registered as a direct pay filer, you must complete and file Form ST-2-DP, Direct Pay Multiple Site Form. If you are registered as a temporary storage filer, you must complete and file Form ST-2-TS, Temporary Storage Multiple Site Form.

Yes. You must file a processable (signed) Form ST-1 for each reporting period regardless of whether there are receipts or purchases to report. If you have no receipts to report, you must file a “zero” return.

You must file your Form ST-1 and pay any tax, E911 Surcharge, and ITAC Assessment due on or before the 20th day of the month following the end of the reporting period. Due dates that fall on Saturdays, Sundays, and state of Illinois holidays are moved to the next business day.

For most taxpayers, the reporting period is over at the end of the month and the return is due on or before the 20th day of the month following the end of the reporting period.

Some taxpayers qualify to file only four times a year (quarterly). These taxpayers’ returns are due on the 20th day of the month following the end of the calendar quarter. Still other taxpayers qualify to file only once a year (annually). These taxpayers’ returns are due on the 20th day of January following the end of the calendar year.

Upon registration, you will be required to file either monthly or quarterly. We review accounts annually and will notify you if your filing status changes.

Taxpayers whose average tax due on Form ST-1 is at least $20,000 a month must make four tax payments each month and must make them electronically. Payments are due on the 7th, 15th, 22nd, and last day of the month. We will notify you if you meet this requirement. At the time of notification, we will send you information explaining specific filing requirements.

Yes. If you file your return and pay the tax on time, you are allowed to take a discount.

If you file your return and pay the E911 Surcharge and ITAC Assessment on time, you are allowed to take a discount of the E911 Surcharge and ITAC Assessment you collected from consumers.

For more information on the applicable discount rate, see Form ST-1 Instructions.

You can file Sales and Use Tax returns electronically using MyTax Illinois. MyTax Illinois allows taxpayers to file Forms ST-1, ART-1, CMFT-1, MMFT-1, PST-1, ST-4, ST-8, ST-14, ST-556, ST-556-LSE, ST-70, and LSE-1. MyTax Illinois also allows Form ST-1 filers to file electronically with special attachments, such as Schedules ST-2-DP, Direct Pay Multiple Site Form, and ST-2-TS, Expanded Temporary Storage Multiple Site Form, as well as special credits, such as prepaid sales tax credit from Form PST-2, Prepaid Sales Tax Statement of Tax Paid.

Forms ST-1 and ST-2 also can be electronically filed using software you write or that you buy or use from an accepted vendor (third party). Visit our website at tax.Illinois.gov for a list of vendors that have been approved to electronically submit these forms. These vendors may charge a transaction fee. If you electronically file using your own software, you must first obtain IDOR approval.

For paper forms, mail your return to the address on the form. If no address is available, mail your Form ST-1 to:

ILLINOIS DEPARTMENT OF REVENUE
RETAILERS OCCUPATION TAX
SPRINGFIELD IL 62796-0001

If you are required to file other tax returns than Form ST-1, do not mail these returns to the same address you use for your Form ST-1. Instead, you can file using MyTax Illinois or mail your other return separately, sending it to the appropriate address on the form. We also provide a list of mailing addresses on our website at tax.Illinois.gov.

If you do not file your return and pay tax, E911 Surcharge, and ITAC Assessment due by the due date, you will be assessed for any tax E911 Surcharge, and ITAC Assessment due (including any portion of the discount for timely filing that we have disallowed) plus penalty and interest. For detailed information about the penalties and interest that may apply, see Publication 103, Penalties and Interest for Illinois Taxes.

Note: We use the U.S. Postal Service postmark date to determine whether a return and payment have been timely filed on items sent through the U.S. mail to IDOR. Private postage meters are not used to establish the date of receipt.

You can use MyTax Illinois or ACH Credit to make electronic payments.

Taxpayers whose average tax due on Form ST-1 is at least $20,000 annually must make payments electronically. We will notify you by mail prior to August 1 if you are required to make your payments electronically. At the time of notification, we will send you information explaining specific payment requirements. This notification will further explain the requirements and outline the payment options you may use.

If you do not refund the over-collected tax, E911, Surcharge, or ITAC Assessment to your customer, you will need to report any over-collected tax, E911 Surcharge, and ITAC Assessment on the excess tax and excess surcharge collected line of Form ST-1. If you refund the overcollected tax, E911 Surcharge, and ITAC Assessment after you have filed your return, you will need to file Form ST-1-X, Amended Sales and Use Tax and E911 Surcharge Return, to receive your credit.

If, after you file your Form ST-1, you find you made a mistake that resulted in an overpayment or an underpayment, or you forgot to send any necessary attachments, you must file Form ST-1-X. If you filed Form ST-1 electronically using MyTax Illinois, you can use that system to also file your Form ST-1-X. Otherwise, you must file a paper Form ST-1-X. Forms are available at tax.Illinois.gov.

For help, visit tax.Illinois.gov or call weekdays between 8 a.m. and 5 p.m. at 1 800 732-8866 or 217 782-3336. The number for our TDD (telecommunications device for the deaf) is 1 800 544-5304.

If you have a specific question about an amended return you have already filed, call us at 217 782-5906.