The Illinois ST-1 form is the return retailers use to report and pay state and local Sales Tax, Use Tax, and the Prepaid Wireless E911 Surcharge to the Illinois Department of Revenue. You file it electronically through MyTax Illinois, and the return and payment are due by the 20th day of the month after your reporting period closes. Two changes that took effect January 1, 2026, reshape how you complete it: groceries are now exempt from the 1% state tax, and destination-based sourcing applies to more sales, with a 15% flat rate assessed when you can’t document where a shipment went.1Illinois Department of Revenue. Informational Bulletin FY 2026-12, Destination-Based Retailers’ Occupation Tax Changes
Who Files and How Often
You file an ST-1 if you make retail sales, leases, or rentals of tangible personal property in Illinois, if you owe Use Tax on out-of-state purchases used in Illinois, or if you sell prepaid wireless service subject to the E911 surcharge.2Illinois Department of Revenue. Form ST-1 Instructions (for Reporting Periods January 2026 and After)
IDOR sets your filing frequency based on your average monthly liability:
- Monthly if your average monthly liability is greater than $200.
- Quarterly if it falls between $50 and $200.
- Annual if it is less than $50.
The return and payment are due by the 20th day of the month following the end of your reporting period. If the 20th lands on a weekend or holiday, the deadline moves to the next business day.3Illinois Department of Revenue. ST-1 Instructions, for Reporting Periods January 2024 Through December 2025 IDOR will tell you if your frequency needs to change based on your history.2Illinois Department of Revenue. Form ST-1 Instructions (for Reporting Periods January 2026 and After)
Larger filers pay more often. If your average monthly tax liability is $20,000 or more, you must make quarter-monthly payments on the 7th, 15th, 22nd, and last day of each month.4Illinois Department of Revenue. Sales and Use Taxes Businesses with annual liability of $20,000 or more must also pay electronically.5Illinois Department of Revenue. Who Must Make Electronic Payments?
What You Need Before You Start
You need an active Certificate of Registration from IDOR before making taxable sales. Apply on Form REG-1 through MyTax Illinois or on paper, with your FEIN or SSN, entity details, and business location.6Illinois Department of Revenue. REG-1 Illinois Business Registration Application
For each reporting period, pull clean figures from your point-of-sale or accounting system:
- Total gross receipts.
- Taxable sales broken out by category: general merchandise, qualifying drugs and medical appliances, groceries, and prepaid wireless transactions.
- Exempt sales, with documentation to support each exemption.
- Sales broken out by delivery location, so you can apply the correct city, county, and special-district rates.
The most common exemption is sales for resale. Keep a valid Certificate of Resale from each purchaser on file. Buyers can use Form CRT-61 or their own certificate as long as it includes the buyer’s Illinois registration or resale number, and certificates should be refreshed at least every three years.7Illinois Department of Revenue. Certificate of Resale Without a properly completed certificate, IDOR will not accept a claim that the sale was for resale.8Illinois General Assembly. 86 Ill. Adm. Code 130.1405 – Sellers Responsibility to Obtain Certificates of Resale
Filling In the Return
State Rates
The state rate is 6.25% on general merchandise, including items that must be titled or registered with a state agency. Qualifying drugs and medical appliances are taxed at 1%.9Illinois Department of Revenue. What Are the Retailers’ Occupation and Use Tax Rates in Illinois? Calculate each category separately using the net taxable sales in that category.
Groceries on Line 5c
As of January 1, 2026, Illinois eliminated the 1% state sales tax on grocery food items. Grocery sales are now reported on Line 5c, a new line added for this change. If your location is inside a jurisdiction that has imposed a local grocery tax (including RTA and MED areas), you still owe local tax on those sales. If your location is outside those areas, report grocery gross receipts and deduct them on Schedule A, Line 16.10Illinois Department of Revenue. Tax Rate Information for Retail Sales of Food and Medicine (PIO-115)
Local Rates and Destination-Based Sourcing
Local taxes from municipalities, counties, mass transit districts, and other special jurisdictions stack on the state rate, and combined rates vary widely across Illinois. Use IDOR’s tax rate finder to identify the exact combination for each location.
Effective January 1, 2026, when a taxable sale to an Illinois purchaser is sourced outside Illinois, the local Retailers’ Occupation Tax is calculated using the rate at the Illinois destination where the property is shipped, delivered, or picked up. If you can’t provide enough information to determine the destination, IDOR assesses those sales at a flat 15% rate assigned to undetermined tax locations.1Illinois Department of Revenue. Informational Bulletin FY 2026-12, Destination-Based Retailers’ Occupation Tax Changes Capturing accurate shipping addresses is now part of getting the return right.
Use Tax
The ST-1 handles Use Tax alongside Sales Tax. If your business bought tangible personal property from outside Illinois for use in Illinois and no Illinois tax was charged, self-assess Use Tax at the rate that would have applied to a comparable in-state purchase. Office equipment ordered from an out-of-state vendor is a typical example.
Prepaid Wireless E911 Surcharge
If you sell prepaid wireless telecommunications service, collect and report the Prepaid Wireless E911 Surcharge. The statewide surcharge is 3% per retail transaction. Chicago, a home rule municipality with a population over 500,000, may impose a surcharge of up to 9% per retail transaction through July 1, 2029.11Illinois General Assembly. 50 ILCS 753 Prepaid Wireless 9-1-1 Surcharge Act Report the total number of applicable transactions and the resulting amount on Schedule B, combined with the ITAC Assessment.12Illinois Department of Revenue. Prepaid Wireless E911 Surcharge
Retailer’s Discount
Illinois compensates retailers for collecting tax through a Retailer’s Discount equal to 1.75% of the state Sales Tax you collected. The discount applies only to the state portion, not local taxes.13Illinois Department of Revenue. What Is the Retailers’ Discount? You forfeit it if your return or payment is late. On $10,000 of state tax, one late day costs $175.
Submitting and Paying
File electronically through MyTax Illinois at mytax.illinois.gov. Log in, select the reporting period, enter your figures, review the totals, and electronically sign the return.
Pay immediately after submission. The two standard methods are ACH Debit, where IDOR pulls funds from your account, and ACH Credit, where you push payment to the state. Businesses with annual liability of $20,000 or more must pay electronically.5Illinois Department of Revenue. Who Must Make Electronic Payments? Initiate payment before the deadline to keep your Retailer’s Discount.
If You File or Pay Late
Late-filing and late-payment penalties are separate and can stack.
The first-tier late-filing penalty is the lesser of $250 or 2% of the tax due on the return, reduced by any timely payments. If you still haven’t filed within 30 days of receiving a nonfiling notice, a second-tier penalty applies: the greater of $250 or an additional 2% of the tax shown due, up to $5,000. The second tier applies even if no tax is owed.14Illinois Department of Revenue. Publication 103, Penalties and Interest for Illinois Taxes
Late-payment penalties climb with time. Payment 1 to 30 days late is penalized at 2% of the unpaid tax. After 30 days, the rate rises to 10%. If IDOR finds the underpayment through an audit, the penalty is 15% of any amount not paid until after the audit begins, and 20% of any amount still unpaid 30 days after IDOR issues an audit-prepared amended return.14Illinois Department of Revenue. Publication 103, Penalties and Interest for Illinois Taxes Interest accrues on unpaid tax starting the day after the due date until you pay in full.
Fixing an Error After Filing
Use Form ST-1-X, the Amended Sales and Use Tax and E911 Surcharge Return. You can file it through MyTax Illinois if you originally filed that period electronically, and you can pay any additional tax at the same time.15Illinois Department of Revenue. Form ST-1-X Instructions (for Reporting Periods January 2026 and After)
The credit window for overpayments depends on when you file. An amended return filed between January 1 and June 30 covers overpayments from the current year and the 36 months before it. One filed between July 1 and December 31 covers the current year and the preceding 30 months.15Illinois Department of Revenue. Form ST-1-X Instructions (for Reporting Periods January 2026 and After) There is no deadline for paying additional tax if you underpaid, but interest and penalties keep running until you do.
Records to Keep
Preserve books and records for each six-month reporting period (January through June, July through December) for three years after the end of that period. If IDOR has issued a Notice of Tax Liability and the matter is unresolved, hold the records until all proceedings, including any court review, are complete.16Illinois General Assembly. 86 Ill. Adm. Code 140.701 – Books and Records – Requirements
In practice, keep sales receipts, exemption and resale certificates, purchase invoices for Use Tax items, and documentation for the tax rates you applied. Mismatches between your filed returns and outside records like 1099-K reports or bank deposits are among the most common audit triggers.