If your business is operating in Illinois, it is important to understand the requirements for sales tax registration. Registering for sales tax in Illinois is necessary for businesses that sell tangible personal property or certain services in the state.
How to get a Illinois Sales Tax License
There are 2 sales tax setup tasks you may need to complete in Illinois to get your sales tax licence. You can follow the guide below to help you get registered directly with the Illinois agencies or use Mosey to do it.
Use Mosey to register for sales tax in Illinois.
Avoid the manual work and headache of registering with state agencies yourself. Automate it with Mosey and stay compliant.
Illinois Purchase Sales Tax Exemption Setup for Corporation
If your nonprofit is organized and operated exclusively for charitable, religious, educational, or governmental purposes, you are eligible to apply for exemption on sales tax for purchases made by filing an Application for Sales Tax Exemption (STAX-1) online with the Illinois Department of Revenue. You will need to provide a copy of the organization's: (1) Articles of Incorporation or Organization, (2) By-laws, (3) IRS determination letter, and (4) Most recent financial statement for nonprofits that are not religious organizations. Note: The sales tax exemption may take up to 90 days to process and must be renewed every five years from the date of issue. If approved, you will be issued a tax-exempt number that begins with “E99” and is followed by six digits (E99XX-XXXX).
File Application for Sales Tax Exemption
File an Application for Sales Tax Exemption (STAX-1) online with the Illinois Department of Revenue.
Illinois Sales Tax Setup for LLP, LLC, Corporation
Sales tax is imposed on a seller’s receipts from sales of tangible personal property for use or consumption in Illinois. For Illinois sales tax, an out-of-state business is determined to have nexus within the state if they maintain a place of business in Illinois. Contractors are generally exempt for the purpose of determining nexus if they do not engage in selling the retailer’s products or refer customers to the retailer. Businesses with contractors have to maintain a Retailer Agreement (which requires annual recertification each January 1) that outlines that solicitation in Illinois is prohibited. If you are subject to Illinois sales tax you must register with the Department of Revenue for a sales tax account. Note: SaaS is not considered a taxable service in Illinois. Nonprofits must collect sales taxes on items it sells, except when: (a) The items are sold only to the organization's members, students, patients, or inmates, (b) The sales are from occasional dinners open to the general public, no more than twice in any one year, or (c) The sales are not in direct competition with businesses in the community.
Register Sales Tax Account Online
Register for a sales tax account using the Reg-1 New Business Registration application on MyTax Illinois. Mark "Done" if you have a sales tax account created during a previous tax registration.
Illinois Sales Tax Filing Requirements & Deadlines
There are 2 sales tax filing requirements & deadlines you may need to complete in Illinois. You can follow the guide below or use Mosey to do it.
Illinois Purchase Sales Tax Exemption Renewal for Corporation
Nonprofit organizations with sales tax exemptions for purchases must renew their Illinois Tax-exempt (E) Number every five years by filing an Application for Sales Tax Exemption (STAX-1) online with the Illinois Department of Revenue. You will need to provide a copy of the organization's: (1) Articles of Incorporation or Organization, (2) By-laws, (3) IRS determination letter, (4) A brief narrative of the organization's purpose, and (5) Most recent financial statement for nonprofits that are not religious organizations. Note: The exemption application may take up to 90 days to process.
File Application for Sales Tax Exemption
File an Application for Sales Tax Exemption (STAX-1) online with the Illinois Department of Revenue to renew your (E) Number.
Illinois Sales Tax Reporting for LLP, LLC, Corporation
The Illinois Department of Revenue determines how often taxpayers must file their returns based on the initial registration and annual liability. You will be required to file and remit sales tax either monthly, quarterly, or annually. Businesses with an average monthly tax liability greater than $200 during the preceding four complete calendar quarters are required to file both monthly returns and quarterly returns. Businesses with an average monthly tax liability less than $200 but greater than $50 only need to file quarterly returns. Businesses that have an average monthly tax liability of less than $50, should only file an annual return. Monthly returns are due on the 20th day of the month following the month reported. Quarterly returns are due on the 20th day of the month following the quarter-end: April 20, July 20, October 20, and January 20. An annual return is due January 20th of the year following the year for which the return is filed. Note: Businesses that have an annual gross receipts average of $20,000 or more are required to electronically file relevant sales tax forms electronically and make quarter-monthly sales tax payments. Quarter-monthly payments are due on the seventh, 15th, 22nd, and the last day of the month.
Files Sales Tax Return and Pay Taxes
Businesses that are subject to the Illinois sales tax must fill out form ST-1, Sales and Use Tax and E911 Surcharge Return. All businesses can use MyTax Illinois to file and pay their sales taxes online.
