Illinois Sales Tax Rate 2026: 6.25% State, 8.98% Avg. Combined
Illinois’s state sales tax rate is 6.25%. Cities, counties and special districts add their own rates on top, so the total depends on where the order is delivered. The average combined state and local rate is 8.98%.
| Illinois sales tax (2026) | Rate |
|---|---|
| State rate | 6.25% |
| Average local rate | 2.73% |
| Average combined rate | 8.98% |
Rates as of July 1, 2026, from the Tax Foundation. The exact rate on an order depends on the delivery address. Look up the exact rate for any Illinois ZIP code with our sales tax calculator.
Illinois has a 6.25% state rate and eliminated its 200-transaction threshold in 2026, 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
Section titled “Quick Reference”| Criterion | Detail |
|---|---|
| State Rate | 6.25% |
| Economic Nexus Threshold | $100,000 gross sales (rolling 12 months) |
| Transaction Threshold | None (eliminated January 1, 2026) |
| Digital Goods / SaaS | Not taxable |
| Typical Filing Frequency | Monthly |
| SST Member | No |
| Registration Portal | mytax.illinois.gov |
Economic Nexus
Section titled “Economic Nexus”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, 2026 — 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
Section titled “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
Section titled “Tax Rate and Product Taxability”Illinois sales tax calculator
Every rate that applies at a US ZIP code, worked out on your order.
Sales tax · Illinois 60601
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Collecting sales tax in Illinois and beyond?
GoodVat tracks your economic nexus in every state, registers you, charges the right rate on every order and files your returns.
Calculation only, not legal or tax advice. Verify with the state Department of Revenue before you file. State averages: Tax Foundation, July 1, 2026.
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
Section titled “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
Section titled “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
Section titled “Registration”Illinois is not an SST member, so you must register directly with the Illinois Department of Revenue.
- Go to MyTax Illinois: mytax.illinois.gov
- Create an account and select “Register a New Business”
- Choose “Retailers’ Occupation Tax” (Illinois’s primary sales tax)
- Provide EIN, business structure, and expected Illinois sales
- 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
Section titled “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
Section titled “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
Section titled “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, 2026. 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.
Illinois Sales Tax FAQ
Section titled “Illinois Sales Tax FAQ”What is the sales tax rate in Illinois?
Section titled “What is the sales tax rate in Illinois?”Illinois’s state sales tax rate is 6.25%. Local taxes are added on top, and the average combined state and local rate is 8.98% (Tax Foundation, July 2026). The exact rate depends on the delivery address.
What is the Illinois economic nexus threshold?
Section titled “What is the Illinois economic nexus threshold?”Remote sellers must register and collect Illinois sales tax once they make more than $100,000 in gross sales into the state (rolling 12 months). The separate transaction-count threshold has been removed.
Is SaaS taxable in Illinois?
Section titled “Is SaaS taxable in Illinois?”Generally no. Illinois does not tax SaaS, though some specific digital products can be taxable. See the Digital Goods and SaaS section above for the details.
How often do you file sales tax in Illinois?
Section titled “How often do you file sales tax in Illinois?”Most sellers file monthly. Illinois assigns your filing frequency when you register, based on how much tax you collect, so lower-volume sellers may file less often.