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Illinois Sales Tax Guide for Small Businesses

Everything you need to know about sales tax in Illinois — rates, deadlines, exemptions, and how to stay compliant without the headache.

Last updated March 2026

Quick Facts

State Rate

6.25%

Avg. Combined

8.85%

Filing Frequency

Monthly, Quarterly, or Annual

Vendor Discount

Yes

Home Rule

No

Illinois Sales Tax Rates

Illinois's state sales tax rate is 6.25%. Cities and counties can add local taxes on top. The average combined rate across Illinois is 8.85%.

The highest combined rate in the state can reach up to 11.00% in some jurisdictions.

Filing Deadlines & Frequency

Filing Frequency

Monthly, Quarterly, or Annual — assigned by IL DOR based on tax liability

Due Dates

20th of the month after the reporting period

File Online

MyTax Illinois: https://mytax.illinois.gov/

Prepayment Required

Prepayment required if your average monthly liability exceeds $20,000.

What's Taxable for Restaurants & Food Businesses

Prepared Food

Yes — prepared food and restaurant meals are taxable at the full 8.85% combined rate.

Grocery Food

Taxed at a reduced rate. Grocery food is taxed at a reduced state rate of 1% (vs. 6.25% general rate). Local taxes still apply at full rate.

Alcohol

Subject to sales tax at the full 6.25% rate plus local taxes and separate state excise taxes

Vendor Discount

Illinois offers a vendor discount

1.75% of tax due (vendor discount) if filed and paid on time

This is money back in your pocket for filing on time. TaxAside files on time, every time — so you capture this discount automatically.

Penalties for Late Filing

Late Filing Penalty

Late filing: 2% per month (max 20%). Late payment: 2% per month (max 20%)

Interest

Adjusted monthly by IL DOR, typically prime rate + 2%

Miss a deadline and Illinoisstarts charging penalties and interest immediately. That adds up fast on a busy restaurant's tax bill.

TaxAside's On-Time Guarantee covers up to $5,000 in penalties if we ever file late.

Calculate Your Illinois Sales Tax

Illinois Sales Tax Calculator
$
State tax (6.25%)$0.00
Est. local tax (2.60%)$0.00
Total tax (8.85%)$0.00
Total with tax$0.00

This calculator uses average combined rates. Your actual rate depends on your exact location.

Get your exact rate →

How TaxAside Helps in Illinois

  • We file on time so you capture Illinois's vendor discount automatically.
  • Daily set-asides mean no tax-day surprises. We pull, calculate, set aside, and file — you do nothing.
  • On-Time Guarantee covers up to $5,000 in penalties if we're ever late filing your Illinois return.
Start Your Free Trial

5-minute setup. No credit card required.

Related State Guides

Wisconsin

5.44% avg. combined

Iowa

6.94% avg. combined

Missouri

8.23% avg. combined

Kentucky

6.00% avg. combined

Indiana

7.00% avg. combined

Tired of worrying about Illinois sales tax?

Let TaxAside handle it. We connect to your POS, set aside the right amount every day, and file your return on time — guaranteed.

Start Your Free Trial

5-minute setup. No credit card required.

Additional Notes

  • • Illinois has separate returns for state tax (ST-1) and Chicago home rule tax
  • • The Chicago area can have combined rates exceeding 10%