Illinois sales and use tax registration is the first compliance step for any business that sells goods at retail in Aurora, Naperville, Batavia or anywhere else in the state, and for out-of-state sellers, including exporters from India and Canada, who ship to Illinois customers. Illinois has two complementary taxes: a Retailers' Occupation Tax on the seller's receipts and a Use Tax on the buyer's use of goods bought elsewhere. Together they make up what people call sales tax. This guide covers registering with the Illinois Department of Revenue (IDOR), choosing the rate, filing Form ST-1 and the rules for remote sellers in 2026.
Who needs Illinois sales and use tax registration?
- Illinois retailers with a store, office, warehouse or agent in Illinois, including sole proprietors and exempt organizations that sell at retail.
- Out-of-state retailers with physical presence in Illinois, meaning an office, warehouse, place of business or representative operating in the state.
- Remote retailers and marketplace facilitators that meet the receipts threshold.
- Lessors and renters of tangible personal property. Since January 1, 2025, leasing or renting such property in the ordinary course of business is treated as a retail sale, other than titled or registered items.
- Resellers who want to buy inventory tax-free need an active registration or resale number.
Individuals who buy from sellers that do not collect Illinois tax owe use tax directly. Employers also register for withholding and unemployment insurance in the same system; see our Illinois payroll guide.
How to register and file, step by step
- Gather your information. Federal EIN, entity details, owner and officer information, a responsible party, each business location, your products and your expected sales.
- Register in MyTax Illinois. On the home page choose "Register a New Business (Form REG-1)." You may also register with the Illinois Department of Employment Security (IDES) there. A mailed paper REG-1 takes weeks instead of days.
- Complete the schedules that apply, such as REG-1-L for business site locations, REG-1-O for owners and officers, and REG-1-R for the responsible party.
- Retrieve your certificate. IDOR no longer prints certificates for the retail taxes; view them under Letters and Messages in your MyTax Illinois account.
- Charge the correct rate. Illinois uses origin rates for in-state retailers and destination rates for remote sales. Local taxes can change on January 1 and July 1.
- Verify exemptions. For resale, get Form CRT-61 or a valid registration or resale number and confirm it using IDOR's "Verify a Registered Business" tool.
- File Form ST-1, Sales and Use Tax and E911 Surcharge Return, on time, with Form ST-2 if you have multiple locations. Monthly and quarterly returns are due on the 20th of the following month; annual returns are due January 20.
- Pay. If your average monthly liability is $20,000 or more, quarter-monthly payments are due on the 7th, 15th, 22nd and last day of the month, and annual liability of $20,000 triggers mandatory electronic funds transfer.
- Keep records of exemption certificates and sales by location.
Rates, groceries and the retailers' discount
Illinois has three rate structures: general merchandise, qualifying drugs and medical appliances, and titled or registered items such as vehicles. The use tax page lists 6.25% for general merchandise. Effective January 1, 2026, Public Act 103-0781 eliminated the state's 1% rate on groceries; IDOR's Compliance Alert CA-2026-01 covers how local grocery tax is collected on and after that date. For sales and use tax returns due on or after January 1, 2025, the retailers' discount is limited to $1,000 per month. Home rule and non-home rule municipal taxes, Regional Transportation Authority taxes in counties including DuPage, Kane and Will, and county taxes can raise the combined rate. DuPage, Kane, McHenry and Will counties also have a county motor fuel tax.
Remote sellers from India and Canada
Since January 1, 2025, retailers formerly collecting Illinois use tax on out-of-state sales are subject to destination-based retailers' occupation tax. A remote retailer is an out-of-state seller with no physical presence that has $100,000 or more in Illinois gross receipts; IDOR tests this quarterly over the prior 12 months. Marketplace facilitators use the same threshold. If a seller does not give enough location information, IDOR can assess tax on those sales at 15% beginning January 1, 2026. IDOR is also running a limited-time Remote Retailer Tax Amnesty from August 1 through October 31, 2026, so check its terms before the window closes. See our foreign seller guide and multistate nexus pages.
Documents you need
- EIN letter and entity formation papers
- Owner and officer details with SSN or ITIN
- Business address, lease and locations
- Product list and expected monthly sales
- Resale and exemption certificates from customers and suppliers
Deadlines and penalties
| Return | Due date |
|---|---|
| ST-1 monthly | 20th of the following month |
| ST-1 quarterly | 20th of the month after the quarter |
| ST-1 annual | January 20 of the following year |
| ST-556 for titled vehicle sales | Within 20 days of delivery |
| ST-44 (individual use tax) | April 15 if $600 or less for the year; if more than $600, the last day of the month after purchase |
| RUT-25 vehicle use tax | When titled, no later than 30 days after bringing the vehicle into Illinois |
IDOR charges penalties and interest for late filing and payment; see its penalties publication for amounts. Failure to register can lead to assessments for back tax.
India, Canada and Illinois
| Point | India | Canada | Illinois |
|---|---|---|---|
| Equivalent tax | GST | GST/HST and provincial taxes | Sales and use tax, no input credit |
| Registration | GSTIN | CRA business number | REG-1 with IDOR |
| Guide | GST compared | Same | This page |
Illinois sales tax is not a value-added tax. A seller does not recover tax paid on purchases through input credits, except by buying for resale with a valid certificate. Your own income is a separate matter: see the Illinois income tax guide and the Illinois compliance calendar.
Worked examples
A Batavia boutique selling Indian textiles. In March it sells $48,000 of general merchandise. Assuming a combined rate of 7.25% (6.25% state plus an assumed 1.0% local), tax is $3,480. It files ST-1 and pays by April 20.
A Toronto e-commerce seller. In the 12 months ending September 30, 2026, it ships $130,000 of goods to Illinois customers. It exceeds $100,000, so it must register, collect destination-based tax and file ST-1. It also considers IDOR's amnesty window.
Mistakes to avoid
- Waiting for the first sale to register.
- Using origin rates for remote sales.
- Accepting a resale certificate without checking the registration.
- Assuming a marketplace always handles your tax.
- Missing the grocery change on January 1, 2026.
How we can help
Our firm, in the Aurora and Fox Valley area, registers businesses with IDOR, sets up MyTax Illinois, prepares ST-1 returns and reviews exemption and nexus questions. We coordinate with your Indian CA or Canadian CPA on GST and HST so cross-border sales are reported consistently. See our sales tax and GST compliance service and the Illinois start-up guide.
Frequently asked questions
How long does registration take?
IDOR says about one to two business days online; paper takes weeks.
Do services have sales tax in Illinois?
Pure services are generally not subject to retailers' occupation tax, but service providers who transfer goods may be under the Service Occupation Tax. Ask us.
Do I charge tax to a customer in another state?
That depends on the other state's rules. Illinois rules apply to sales to Illinois buyers.
What do I do if I buy goods from India and no tax is charged?
You may owe Illinois use tax on goods you use in Illinois, reported on Form ST-44 unless you are a registered retailer.
Official sources
- IDOR: Sales and use taxes, Retailers' Occupation Tax and Use Tax
- IDOR: Retailer resources and highlights
- IDOR: Business registration
- IDOR: Use tax rates
- IDOR: File a business tax return
This page summarizes public guidance in plain language. If anything here differs from the official source, the official source controls.
General information only. It is not tax, legal, accounting or immigration advice for your situation, and rules change; confirm the current rules with the official source or a licensed professional in the relevant country.