Destination-Based Sales Tax Assistance Effective January 1, 2021

This webpage is intended as a guide for Remote (Out-of-State) Retailers and Marketplace Facilitators who must collect and remit "Destination-based" Sales Tax. Illinois retailers subject to "Origin-based" Sales Tax should continue collecting and remitting their Illinois Sales Tax obligation as they have been.

Destination-based Rate means the total state and local retailers' occupation tax rate calculated for a sale using the rate in effect at the Illinois location to which the tangible personal property is shipped or delivered or at which possession is taken by the purchaser. [35 ILCS 120/2-12]

Remote retailers without a physical presence and Marketplace Facilitators who meet either of the tax remittance thresholds for sales into Illinois must collect Retailers' Occupation Tax at the destination-based rate. For more information on Destination-based Sales Tax, see the Leveling the Playing Field for Illinois Retail Resource Page.

Use the following steps to aid in

  • determining your tax rate and local government location code,
  • adding a changing location to your MyTax Illinois account, and
  • filing your Form ST-1/ ST-2.


Determining Your Tax Rate and the Location Code for a destination-based sale made to an Illinois purchaser

To calculate the correct tax to collect and to determine the Location Code for your sale to an Illinois purchaser, use the "Search by Address" function of our MyTax Illinois Tax Rate Finder found on our website, mytax.illinois.gov.

  1. Enter the address of your purchaser or the destination of the sale
  2. Validate address to ensure the 9-digit zip code is properly displayed
  3. Select "Conduct Inquiry"
  4. Note the appropriate sales tax rate for the address where the taxable sale will be delivered or where possession will be taken (destination). This tax rate will be entered on the ST-2 Multiple Site Form. Multiple sales made to the same location code with the same tax rate will be entered as a single aggregate entry on the ST-2. 
  5. Note the appropriate Location Code for the address where the taxable sale will be delivered or where possession will be taken (destination). The Location code and Local Government name will be used when adding a location to your registration and when reporting the location on the ST-2 Multiple Site Form. 
    Note: If the location code has already been added to your registration, you do not need to add it again. 
  6. Repeat for each sale to be reported


Add the location code to your MyTax sales tax account

In order to file and pay sales tax correctly and without processing delays, each location in the state of Illinois in which you make sales must be individually added to your registration before submitting your Form ST-1.

  1. Log in to your MyTax Illinois account. If you do not have a MyTax Illinois Account or need to change your registration from Use Tax to destination-based sales tax visit MyTax.Illinois.gov for more information or contact Central Registration at 217-785-3707 or REV.Centreg@illinois.gov for assistance.  
  2. Select your sales tax (ST-1) account under the Accounts tab.
  3. Under the panel "Account Maintenance," select "Maintain Locations".
  4. Select the "Add Changing Location Sites" tab to add the location of your sale. (Locations used for destination-based sales tax are not entered by address in your account)
  5. Check the appropriate location for your sale. You may filter these locations by entering in the location code (column labeled code) noted from the Tax Rate Finder or by the Local Government name (labeled municipality) the location. NOTE: Some municipalities will have more than one taxing jurisdiction (business districts, medical districts or multi-county municipalities), be sure to use the location code provided in the tax rate finder for the address of your sale. (If you have previously added a location, it will not show as available to add again.)
  6. Once you have added the location into your account, you will not need to add it again for subsequent sales.


Filing for the period

All sales from a period are reported on an ST-1 tax return, which is due on the 20th of the month following the close of the reporting period. The ST-2 is used to report sales and tax collected by location code. 


For MyTax Illinois Filers – MyTax has many automated features to help complete your Sales Tax return faster and easier. In MyTax Illinois:

  1. Select the ST-2 tab at the top of the form to report taxable sales made to each location. After selecting the ST-2 tab, users can access the desired location by selecting the appropriate location code link from a list of locations that have been added to their registration.
  2. Enter the amount of taxable transactions for each location. Multiple sales made to the same location code with the same tax rate will be entered as a single aggregate entry on the ST-2.
  3. Tax rates will automatically be populated on the ST-2 based off the location that was added to your registration.
  4. Tax due will be systematically calculated using your general merchandise sales (4a) and/or Food, drug and medical appliances (5a) and carried to the ST-1.
  5. Complete the ST-1. See the Form ST-1 Instructions for more information.

For Direct File (Electronic) Filers – Taxpayers that use direct file options should frequently visit IDOR's Electronic Filing Program for Sales & Use Tax Returns page for updates. IDOR will post updates to electronic filing information as they become available.


Examples for reporting sales on the ST-2

Example 1 --        

The Basket Place is a registered remote retailer which reports sales of gift baskets to three different addresses in Jerseyville. 

1st transaction: $50
2nd transaction: $25
3rd transaction: $100

The tax rate finder returns the same location code for all three addresses. The location code is 04200012R00 with a tax rate of 8.500%. The transactions in this example are reported on the same ST-2 tab, therefore only one location must be added through MyTax using the appropriate location code (04200012R00) and location name (Jerseyville). The taxable transactions ($50 + $25 + $100) will be totaled (total of $175) and entered as a single entry on line 4a of the ST-2 tab for location 04200012R00. The tax is systematically calculated for the taxable sales on line 4b. 

 

Example 2 --        

Klothes for Kittens is a registered remote retailer which reports sales to two addresses in Springfield.

1st transaction: $100 sale of rain boots for cats to John Smith
2nd transaction: $200 sale of collars for cats to Ms. Jones

For the first transaction, the tax rate finder returns a location code of 08400016R00 and a tax rate of 9.75%. For the second transaction, the tax rate finder returns a location code of 08400016R01 with a Springfield-South Central business district tax rate of 10.75%. The transactions in this example are reported on separate ST-2 tabs, therefore both locations must be added through MyTax using the appropriate location codes and location names. The amounts are entered on line 4a of their respective ST-2 tabs. The tax is systematically calculated for the taxable sales on line 4b.



Example 3 --        

The Spicy Owl is a registered remote retailer which reports separate sales of spice grinders to multiple restaurants in Troy. 

1st transaction: $100 sale to a restaurant address in Troy
2nd transaction: $150 sale to a restaurant address in Troy (MED)
3rd transaction: $50 sale to a restaurant address in Troy-Dorothy Drive Business District

For the first transaction ($100), the tax rate finder returns a location code of 06000244R00 and a tax rate of 6.60%.  For the second transaction ($150), the tax rate finder returns a location code of 06000274R10 and a tax rate of 6.85%.  For the third transaction ($50), the tax rate finder returns a location code of 06000274R01 and a tax rate of 6.85%. The Spicy Owl appropriately used Tax Rate Finder to add all three changing locations with the appropriate location code and location name. The transactions in this example are reported on separate ST-2 tabs. The amounts are entered on line 4a of their respective ST-2 tabs. The tax is systematically calculated for the taxable sales on line 4b. 

 



Additional Notes

  • MyTax will systematically round sales figures appropriately.

    For example, $1.49 becomes $1 and $2.50 becomes $3. If you need to add two or more amounts to figure the amount to enter on a line, include cents when adding the amounts and round only the total.