Enterprise
Individual & Small Business
Illinois Sales Tax Nexus: Economic Nexus Threshold (2026)
Illinois's economic nexus threshold for remote sellers is $100,000 in sales. Sales made through marketplace facilitators do not count toward your own Illinois threshold. Inventory or another physical presence in Illinois generally creates nexus regardless of sales. The state rate is 6.25%, plus local taxes.
Illinois sales tax nexus: key facts
| Sales threshold | $100,000 |
|---|---|
| Transaction threshold | None |
| Test | Sales only |
| What counts | cumulative gross receipts ($100,000 or more) from sales of tangible personal property to purchasers in Illinois. Excludes sales for resale, occasional sales, and marketplace sales where the facilitator has certified it assumes retailer duties. Exempt sales are included |
| Measurement period | rolling 12-month lookback period, tested quarterly (periods ending March 31, June 30, September 30, December 31). Once met, collect beginning the first day of the following quarter for one year, then re-test |
| Marketplace sales count toward your threshold? | No, excluded |
| Marketplace facilitator law | Yes: marketplaces generally collect on the sales they facilitate |
| State rate | 6.25% |
| Local sales taxes | Yes, in addition to the state rate |
| Current threshold effective | January 1, 2026 |
| Recent change | Yes, see the note below |
| Registration | Official registration page |
| Last researched | September 23, 2026 |
The state rate is the statewide state-level rate only. Local and district rates are extra where they apply.
Recent change
Public Act 104-0006 (signed June 2025) removed the 200-transaction threshold effective January 1, 2026. Sellers that met only the transaction test had to review the 12 months ending 12/31/2025, and IDOR converted such registrations to voluntary use tax status. Rolling quarterly testing resumed for quarters beginning after March 31, 2026. Also from 1/1/2026, destination sales reported without location information are assessed at a 15% rate. Earlier, from January 1, 2025, remote retailers and marketplace facilitators collect destination-based state and local Retailers' Occupation Tax (Leveling the Playing Field for Illinois Retail Act) instead of state-level use tax. The 1% state tax on groceries was repealed effective 1/1/2026, but municipalities and counties may impose a 1% local grocery tax.
Quick check: do you have nexus in Illinois?
Enter your Illinois sales to see whether you may have nexus.
Selling into several states? Use the full Sales Tax Nexus Checker. Your figures stay in your browser.
What to do after crossing the Illinois threshold
When it starts:
- Once met, collect beginning the first day of the following quarter for one year, then re-test.
- Confirm the numbers. Check your Illinois sales against the measure and period in the key facts above.
- Register before you collect. Use Illinois's official registration page. Collecting a state's tax without a registration is generally not allowed.
- Collect and file. Charge Illinois sales tax (plus any local taxes that apply at the delivery address) on taxable sales from the start date, and file returns on the schedule the state assigns. Marketplaces generally collect on the sales they facilitate, so you usually collect on your direct sales.
- Look back. If you crossed the threshold in an earlier period and did not register, get advice on those periods. Many states have voluntary disclosure programs that may limit penalties.
Physical presence and inventory in Illinois
A retailer that fulfills any orders from inventory located in Illinois (including third-party warehouses) is not a 'remote retailer'. Its Illinois-sourced sales are subject to state and local ROT at the rate of the inventory or selling location (origin-based), not the destination (PIO-125; Bulletin FY 2026-12).
Marketplace sellers in Illinois
Do marketplace sales count toward your own threshold? No, excluded.
Remote retailers exclude sales made through a marketplace as long as they have received certification that the marketplace facilitator assumes the rights and duties of the retailer under the Retailers' Occupation Tax Act (Informational Bulletin FY 2024-08). Marketplace facilitators apply the same $100,000 test to their own plus facilitated sales. They must report marketplace sales on a separate account/Form ST-1 from their own sales, and remote retailers leave marketplace sales off their own ST-1.
Other things to know about Illinois
- Illinois uses Retailers' Occupation Tax (ROT) and Use Tax rather than a single 'sales tax'. Since 1/1/2025, sales shipped from outside Illinois are subject to destination-based ROT at the combined state and local rate of the delivery address, and in-state-sourced sales use the origin location's rate.
- Not a Streamlined Sales Tax full member state. Many home-rule municipalities and counties impose their own ROT administered by IDOR, and rates can change each January 1 and July 1. Use the MyTax Illinois Tax Rate Finder to look up rates by address.
- State rate is 6.25% on general merchandise and 1% on qualifying drugs and medical appliances. Groceries have 0% state tax from 1/1/2026, with an optional local 1% grocery tax.
- Destination-based sales must be reported with location detail (Form ST-1/ST-2). Missing location information triggers a 15% assessment rate from 1/1/2026.
Frequently asked questions
What is the Illinois economic nexus threshold?
$100,000 in sales, measured over the rolling 12-month lookback period, tested quarterly (periods ending March 31, June 30, September 30, December 31). Once met, collect beginning the first day of the following quarter for one year, then re-test. What counts: Cumulative gross receipts ($100,000 or more) from sales of tangible personal property to purchasers in Illinois. Excludes sales for resale, occasional sales, and marketplace sales where the facilitator has certified it assumes retailer duties. Exempt sales are included.
Do marketplace sales count toward the Illinois threshold?
No, excluded. Remote retailers exclude sales made through a marketplace as long as they have received certification that the marketplace facilitator assumes the rights and duties of the retailer under the Retailers' Occupation Tax Act (Informational Bulletin FY 2024-08). Marketplace facilitators apply the same $100,000 test to their own plus facilitated sales. They must report marketplace sales on a separate account/Form ST-1 from their own sales, and remote retailers leave marketplace sales off their own ST-1.
Does FBA or 3PL inventory in Illinois create nexus?
A retailer that fulfills any orders from inventory located in Illinois (including third-party warehouses) is not a 'remote retailer'. Its Illinois-sourced sales are subject to state and local ROT at the rate of the inventory or selling location (origin-based), not the destination (PIO-125; Bulletin FY 2026-12).
When do I have to start collecting Illinois sales tax?
Once met, collect beginning the first day of the following quarter for one year, then re-test.
Registration: official registration page.
Does Illinois have a transaction-count test?
No. Illinois uses only the dollar threshold. Public Act 104-0006 (signed June 2025) removed the 200-transaction threshold effective January 1, 2026. Sellers that met only the transaction test had to review the 12 months ending 12/31/2025, and IDOR converted such registrations to voluntary use tax status.
Crossed the Illinois threshold, or not sure? A professional can confirm it and handle registration.
Nexus Study + Registration + Cleanup
Fixed price, quoted before any work starts
- State-by-state review of your sales and inventory locations
- Registration in states where you have nexus
- Plan for any past-due periods (including voluntary disclosure where appropriate)
- Ongoing sales tax filing option
Disclaimer: This page provides general information for educational purposes and is not tax, legal or accounting advice. State rules change, and whether you have nexus can depend on facts not covered here. Confirm with Illinois's official guidance or a qualified professional before acting. RAHA Financials is not affiliated with any state tax agency.
Sources
- Primary official source: https://tax.illinois.gov/research/publications/bulletins/fy-2026-12.html
- tax.illinois.gov: https://tax.illinois.gov/content/dam/soi/en/web/tax/research/publications/bulletins/documents/2026/fy-2026-12.pdf
- taxarchive.illinois.gov: https://taxarchive.illinois.gov/research/dated-publications/informational-bulletins-archive/fy-2024-08.html
- tax.illinois.gov: https://tax.illinois.gov/research/taxinformation/sales/destination-based-sales-tax-assistance.html
- tax.illinois.gov: https://tax.illinois.gov/content/dam/soi/en/web/tax/research/taxinformation/sales/documents/pio-101-illinois-tax-matrix.pdf
- tax.illinois.gov: https://tax.illinois.gov/research/taxinformation/sales/rot.html
- tax.illinois.gov: https://tax.illinois.gov/research/publications/bulletins/fy-2026-03.html