How To Register For A Sales Tax Permit In Illinois

WHICH GOODS AND SERVICES ARE TAXABLE?

Determining whether or non the products or services your company sells are taxable in Illinois is the start step in sales taxation compliance.

Traditional Goods or Services

Appurtenances that are subject area to sales tax in Illinois include concrete property, like furniture, abode appliances, and motor vehicles.

Illinois charges areduced rate on both prescription and not-prescription medicine every bit well equally groceries.

The Illinois Department of Revenue has also published a comprehensive guide to sales tax exemptions and exclusions.

Digital Goods or Services

A digital good or service is anything electronically delivered, such as an album downloaded from iTunes or a motion-picture show purchased from Amazon.

Illinois Statedoes non crave businesses to collect sales tax on the auction of digital goods or services.

HOW TO REGISTER FOR ILLINOIS SALES Taxation

If you lot determined that you need to charge sales tax on some or all of the goods and services your business sells, your next step is to register for a seller'southward allow. This allows your business organization to collect sales taxation on behalf of your local and land governments.

In order to register, you will need the following information:

Business organisation name
Business entity type
Description of business activities
Date business organization activities began or will begin
Business address and mailing address
Concern contact data
The Due north American Industry Classification System (NAICS) code that all-time matches your business
Federal Employer Identification Number (FEIN)
Your name, Social Security Number (SSN), driver's license number, personal accost, and personal contact information of owner/sole proprietor
List of business concern officers, partners, managing members, and/or trustees
Employment information (date of hire, number of employees, payroll amounts, payroll agent'south PTIN, if applicative)

Illinois requires that any seller with a sales tax permit file a sales taxation render on your due date fifty-fifty if yous don't have any sales tax to report or pay.

Register for a Seller'due south Permit online through the allow and license registration section of mytax Illinois.

GET A SELLER'S PERMIT

Fee: None

Expiration: None

Relieve Money with a Resale Certificate

With a resale certificate, also known equally a reseller's permit, your business does not accept to pay sales tax when purchasing goods for resale.

Download the Resale Certificate through the Illinois Department of Revenue

Download Resale Certificate

Educational activity: Nowadays the document to the seller at the time of buy.

COLLECTING SALES TAX

Later on getting your seller's permit and launching your business, you volition demand to determine how much sales tax you lot need to charge different customers. To avoid fines and the risk of costly audits, information technology'southward important for business owners to collect the correct charge per unit of sales tax.

When calculating sales tax, you'll demand to consider the following kinds of sales:

Store Sales
Aircraft In-State
Out-of-Country Sales

Store Sales

For traditional concern owners selling goods or services on-site, calculating sales tax is easy: all sales are taxed at the rate based on the location of the store.

Hither's an instance of what this scenario looks similar:

Mary owns and manages a bookstore in Rockford, Illinois. Since books are taxable in the country of Illinois, Mary charges her customers a flat-charge per unit sales tax of 8.25% on all sales. This includes Illinois'south sales tax rate of 6.25%, Winnebago county'southward sales taxation rate of ane%, and Rockford'southward urban center tax charge per unit of 1.0%.

In-state Sales

The state of Illinois follows what is known as anorigin-based sales tax policy. This means that long-distance sales inside Illinois are taxed according to the address of the heir-apparent. This policy applies to country, canton, and city sales taxes.

Consider the post-obit case:

Steve runs his own business organisation selling electronics on eBay out of his dwelling in Chicago, Illinois. A customer living in Urbana, Illinois finds Steve'due south eBay page and purchases a $350 pair of headphones. When calculating the sales tax for this purchase, Steve applies the half dozen.25% state taxation rate for Illinois, plus 1.75% for Cook county, i.25% for Chicago's city taxation rate, and i.0% for the district tax rate. At a total sales tax charge per unit of ten.25%, the full cost is $385.88 ($35.88 sales taxation).

Out-of-state Sales

Illinois businesses just need to pay sales revenue enhancement on out-of-state sales if they havenexus in other states.Nexus means that the business has a concrete presence in another state.

Common types ofnexus include:

Aphysical location, such as an office, store, or warehouse
Anemployee who works remotely or who is a traveling sales representative
Amarketing affiliate
Drop-shipping from a third party seller.
Atemporary physical location, including festival and off-white booths.

FILE YOUR SALES Tax RETURN

Now that you've registered for your Illinois seller's permit and know how to charge the right amount of sales tax to all of your customers, you are all set to file your sales tax render. Just be sure to keep up with all filing deadlines to avert penalties and fines.

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How to File

Illinois requires businesses to file sales revenue enhancement returns and submit sales tax payments online.

File the Illinois Sales Tax Return

You will practise this with the MyTax Illinois page of the Illinois Department of Revenue website.

FILE ONLINE

How Often Should Y'all File?

Annual filing: If your business concern collects less than $50 in sales revenue enhancement per month and then your business should file returns on an annual basis.
Quarterly filing: If your business collects betwixt $50 and $200 in sales tax per month and so your business should file returns on a quarterly basis.
Monthly filing: If your business collects more $200 in sales tax per month then your business should file returns on a monthly basis.

Note: Illinoisrequires you to file a sales tax render even if you take no sales tax to report.

Filing Deadlines

All Illinois sales revenue enhancement return deadlines autumn on the20th day of the month, unless it is a weekend or federal vacation, in which case the deadline is moved back to the side by side business organization day. Beneath is a list of this twelvemonth's filing deadlines:

Annual filing: January twenty, 2020

Quarterly filing:

Q1 (Jan. - Mar.):April 20
Q2 (April - June):July 20
Q3 (July - Sept.):October 22
Q4 (October. - Dec.):January 22

Monthly filing: The20th of the post-obit calendar month, or the adjacent business organization day, due east.g.April 20th for the month of March, orMay 22th for the month of Apr.

For a complete list of deadlines, cheque out the Tax Filing Calendar on the Illinois Department of Acquirement website.

Penalties for Tardily Filing

Illinois charges alate filing punishment of two% of the original tax if the filing date is within thirty days of the filing deadline. If yous exercise not file a return inside xxx days afterwards receiving a notice of not-filing, an additional penalisation will exist imposed equal to the greater of $250 or ii% of the tax shown due on the return without regard to timely payments. The penalty cannot exceed $5000.

Illinois also charges alate payment penalty that is equal to 2% if the time of payment falls between ane-30 days after the deadline. Afterward 30 days, the charge per unit increases to x% of the unpaid tax shown on the original taxation return. If your company is audited for unpaid sales tax, the interest penalty increases to 15%, and if your company continues to delay the charge per unit can rise to 20% of the full unpaid sales tax.