“Sales tax” is imposed on a seller’s receipts from sales of tangible personal property for use or consumption.
If the seller (typically an out-of-state business, such as a catalog company or a retailer making sales on the Internet) does not charge Illinois Sales Tax, the purchaser must pay the tax directly to the department.
The term “sales tax” actually refers to several tax acts. Sales tax is a combination of “occupation” taxes that are imposed on sellers’ receipts and “use” taxes that are imposed on amounts paid by purchasers. Sellers owe the occupation tax to the department; they reimburse themselves for this liability by collecting use tax from the buyers. “Sales tax” is the combination of all state, local, mass transit, water commission, home rule occupation and use, non-home rule occupation and use, park district, and county public safety taxes.
For purposes of this document, Illinois Sales Tax has three rate structures — one for qualifying food, drugs, and medical appliances; one for items required to be titled or registered (vehicles); and another for all other general merchandise.
“Qualifying food” applies to food not prepared by the retailer for immediate consumption, such as grocery store food items. “Qualifying food, drugs, and medical appliances” include:
- food that has not been prepared for immediate consumption, such as most food sold at grocery stores, excluding hot foods, alcoholic beverages, and soft drinks;
- prescription medicines and nonprescription items claimed to have medicinal value, such as aspirin, cough medicine, and medicated hand lotion, and
- prescription and nonprescription medical appliances that directly replace a malfunctioning part of the human body, such as corrective eyewear, contact lenses, prostheses, insulin syringes, and dentures.
- motor vehicles, ATVs, watercraft, aircraft, trailers, and mobile homes; and
- motor vehicles, aircraft, and vessels owned by a business when that business moves into or relocates to Illinois.
Other general merchandise
“Other general merchandise” includes sales of most tangible personal property including sales of:
- soft drinks;
- prepared food such as food purchased at a restaurant;
- photo processing (getting pictures developed);
- prewritten and “canned” computer software;
- prepaid telephone calling cards and other prepaid telephone calling arrangements;
- repair parts and other items transferred or sold in conjunction with providing a service under certain circumstances based on the actual selling price.
Use the Tax Rate Finder to look up location specific tax rates