Illinois Sales Tax Guide & Nexus Calculator (2026)

Illinois has a 6.25% state rate and eliminated its 200-transaction threshold in 2025, moving to a revenue-only nexus trigger. SaaS is generally not taxable in Illinois, though downloaded software may be. Illinois also uses origin-based sourcing for in-state sellers — a distinction that matters if you have an Illinois presence.

Quick Reference

Criterion	Detail
State Rate	6.25%
Economic Nexus Threshold	$100,000 gross sales (rolling 12 months)
Transaction Threshold	None (eliminated January 1, 2025)
Digital Goods / SaaS	Not taxable
Typical Filing Frequency	Monthly
SST Member	No
Registration Portal	mytax.illinois.gov

Economic Nexus

State / TerritorySelect a state…AL — AlabamaAK — AlaskaAZ — ArizonaAR — ArkansasCA — CaliforniaCO — ColoradoCT — ConnecticutDE — DelawareDC — Washington D.C.FL — FloridaGA — GeorgiaHI — HawaiiID — IdahoIL — IllinoisIN — IndianaIA — IowaKS — KansasKY — KentuckyLA — LouisianaME — MaineMD — MarylandMA — MassachusettsMI — MichiganMN — MinnesotaMS — MississippiMO — MissouriMT — MontanaNE — NebraskaNV — NevadaNH — New HampshireNJ — New JerseyNM — New MexicoNY — New YorkNC — North CarolinaND — North DakotaOH — OhioOK — OklahomaOR — OregonPA — PennsylvaniaPR — Puerto RicoRI — Rhode IslandSC — South CarolinaSD — South DakotaTN — TennesseeTX — TexasUT — UtahVT — VermontVA — VirginiaWA — WashingtonWV — West VirginiaWI — WisconsinWY — Wyoming

Gross Revenue (USD)

$

Total Transactions (not required)

Enter your trailing 12-month revenue to calculate nexus status.

For informational purposes only · Not legal or tax advice · Consult a licensed tax professional · Rules as of 2026

Illinois’s economic nexus threshold is $100,000 in gross sales into Illinois in the prior 12-month period. Illinois eliminated its alternative 200-transaction threshold effective January 1, 2025 — only the revenue threshold now applies.

Marketplace-facilitated sales (Amazon, Etsy, eBay) count toward the $100,000 threshold. Once exceeded, registration and collection obligations begin.

Important: Illinois counts sales of tangible personal property toward the threshold. Revenue from services or SaaS may not count toward the economic nexus threshold — though this is complex and evolving. Verify with current IDOR guidance for your specific product mix.

Origin vs. Destination Sourcing

Illinois uses a dual sourcing system that differs depending on whether you have a physical Illinois presence:

• Remote sellers (no Illinois physical presence): Use destination-based sourcing — collect tax based on the buyer’s Illinois location
• Illinois-based sellers (with physical presence): Use origin-based sourcing for in-state sales — collect based on the seller’s Illinois location

For remote sellers, destination sourcing means applying the correct rate for each buyer’s zip code — which includes state plus local (ROT) rates.

Tax Rate and Product Taxability

Illinois’s state rate structure:

• State rate: 6.25% (comprises a 5% base + 1.25% for local governments)
• County and municipal rates: typically 1%–4.75% additional
• Combined maximum: up to 11% in Chicago

Chicago is one of the highest combined rate cities in the US due to overlapping county (Cook County), city, and transit district taxes.

Product Categories

Taxable: Tangible personal property, most retail goods.

Reduced rate (1%): Groceries and drugs qualifying for the reduced rate pay 1% state rate (not 6.25%).

Exempt: Prescription drugs (0%), qualifying farm inputs, certain manufacturing machinery.

Not taxable: SaaS, most digital services — see below.

Digital Goods and SaaS

Illinois does not tax SaaS under current law and Department of Revenue guidance. Illinois’s Retailers’ Occupation Tax (the base of Illinois’s sales tax system) applies to sales of tangible personal property — and the IDOR has generally held that remotely accessed SaaS is not tangible personal property.

Illinois digital goods framework:

• SaaS — not taxable; confirmed by IDOR in multiple rulings
• Downloaded software — Illinois has taxed prewritten software delivered electronically (a copy is transferred), though this position has been subject to litigation
• Custom software — generally not taxable
• Digital content (ebooks, streaming, music) — generally not taxable in Illinois

For most SaaS businesses, Illinois is a non-taxable state — a significant benefit for digital sellers in a large market.

One exception: Software delivered as a tangible medium (USB, CD) remains taxable. And if your “SaaS” product has a downloadable desktop component that customers install, IDOR may treat part of the transaction as a taxable software sale.

Registration

Illinois is not an SST member, so you must register directly with the Illinois Department of Revenue.

1. Go to MyTax Illinois: mytax.illinois.gov
2. Create an account and select “Register a New Business”
3. Choose “Retailers’ Occupation Tax” (Illinois’s primary sales tax)
4. Provide EIN, business structure, and expected Illinois sales
5. You will receive an Illinois Business Tax (IBT) Number

Registration is free. A Certificate of Registration is issued and should be displayed if you operate a physical retail location.

Foreign Sellers

Illinois accepts foreign business registrations through MyTax Illinois. A US EIN is required. Illinois does not require a registered agent for remote sellers.

Filing Frequency and Deadlines

Illinois assigns filing frequency based on prior-year Illinois sales tax liability:

Annual Tax Liability	Filing Frequency
Less than $3,600	Annual
$3,600–$12,000	Quarterly
More than $12,000	Monthly

Monthly due dates: Returns are due on the 20th of the following month (e.g., January return due February 20).

Returns are filed through MyTax Illinois. Electronic filing is required for larger sellers.

Compliance Notes

Transaction threshold eliminated 2025: If you were monitoring Illinois for the 200-transaction trigger, this is no longer relevant as of January 1, 2025. Only the $100,000 revenue threshold applies.

SaaS sellers likely have no Illinois obligation: If your revenue is purely SaaS with no tangible goods, Illinois’s current framework likely means no collection obligation. Monitor IDOR guidance in case the legislature expands digital goods taxability.

Chicago rate complexity: Chicago’s combined rate (approximately 10.25%–10.75%) includes state, county, city, transit, and other district rates. Chicago-destined orders require careful rate configuration.

Origin sourcing for Illinois sellers: If you have a warehouse, office, or FBA inventory in Illinois, the origin-sourcing rule applies to your Illinois-to-Illinois sales. This can reduce your collection rate compared to destination sourcing in some scenarios.

ROT vs. Use Tax: Illinois technically has a Retailers’ Occupation Tax (ROT) for in-state sellers and a Use Tax system for remote sellers. They function similarly for collection purposes but involve different statutory frameworks.

Not SST: Illinois is not an SST member.

Related Guides

• US Sales Tax Overview
• State Sales Tax Index — All 50 States
• Amazon FBA and Physical Nexus
• Stripe Tax for Digital Goods and SaaS
• Foreign Sellers Guide to US Sales Tax
• US Sales Tax Compliance Checklist