Illinois Retailers Occupation Tax and Use Tax Guide
Illinois retailers occupation tax and use tax explained for foreign-owned and out-of-state sellers: nexus, the $100,000 test, 2026 rates and filing.
Last reviewed October 27, 2026 · 3 min read · General information, not legal advice
General information only, not legal advice. CPA Tax Payroll and Accounting Corp is a CPA firm, not a law firm. Laws change: confirm with the official source or a licensed attorney before you act. Read the full notice.
The Illinois retailers occupation tax and the Illinois use tax are the two halves of what most people call sales tax. The first (35 ILCS 120) taxes a seller's receipts from retail sales of goods; the second (35 ILCS 105) taxes a buyer for using goods in Illinois. Both are run by the Illinois Department of Revenue (IDOR). The page is written for owners in Canada, India or elsewhere who sell into Illinois.
Slide show: Seven slides on the Illinois sales and use tax
What it is
Two linked taxes on retail sales of goods: one on the seller, one on the buyer.
Who it reaches
Illinois retailers, out-of-state sellers, remote retailers and marketplace facilitators.
The rule
Register, collect the correct combined rate, and file Form ST-1.
The numbers
State rate 6.25% on general merchandise. Remote sellers are covered at $100,000 of Illinois receipts (2026).
The dates
Form ST-1 falls due on the 20th of the month following the period. The amnesty ends 31 October 2026.
The penalty
Paying 1 to 30 days late brings a 2% penalty; paying later than that, 10%. Selling in Illinois without registering can be a Class A misdemeanor.
The tip
Test Illinois receipts at every quarter-end. The Ship-To Lantern Sweep on page two shows how.
Who the Illinois retailers occupation tax covers
Seller or buyer
Rule
Illinois retailer, including a lessor
Collects at the origin rate; since 1 January 2025 the leasing of most goods has counted as retail
Out-of-state seller with an Illinois office, warehouse or agent
Covered like an Illinois retailer; origin or destination rate depends on sourcing
Remote retailer, no presence
$100,000 of receipts in the prior 12 months, tested each quarter-end; destination rate
Marketplace facilitator
Same test; it collects tax at the destination rate on behalf of its sellers
Buyer who was not charged Illinois tax
Owes use tax at the rate of 6.25% or 1%, less tax paid to another state
Reseller
Usually buys tax-free with a CRT-61 resale certificate and an active account ID
What it means for a foreign-owned or out-of-state seller
Situation
What the law says
What to check
Company in Canada or India with no Illinois presence ships goods here
Remote retailer at $100,000 of receipts; destination rate
Receipts at each quarter-end
U.S. company with an Illinois warehouse
Treated like an Illinois retailer
Sourcing of each sale
Sales through a marketplace
A facilitator that certifies it is responsible takes over collection
Each marketplace's certification
Customer address missing
15% undetermined-location rate from 1 January 2026