Key takeaways
- Illinois frequency is set by average monthly liability: above $200 is monthly, $50 to $200 is quarterly, and under $50 is annual.
- The state rate is 6.25%, and local rates are added by location, so one flat rate per state will be wrong.
- Multi-site filers attach Form ST-2 for each site, and destination sales are split by the customer's jurisdiction.
- Sales taxed at a rate that changed on January 1, 2026 go on Line 8a of Form ST-1 and Form ST-2.
Set up MyTax Illinois before the first return
Form ST-1 can be filed electronically through MyTax Illinois, and a paper return is mailed to the address printed on the form. IDOR's requirements page says electronic filing is mandatory once average annual gross receipts reach $20,000. The ST-1 instructions say only that some taxpayers are mandated and point to the Department's site, so confirm the status in the account before you choose paper for a client near that line.
Register every business location before the first return. IDOR's requirements page says a filer with more than one site is registered as a multiple location filer, and the Form ST-2 breakdown is built site by site.
Pull rates from the MyTax Illinois Tax Rate Finder, not from a rate table in a blog. Bulletin FY 2026-10-A tells filers to select the month they are filing for.
Set the filing frequency from average monthly liability
IDOR determines how often a taxpayer files from the initial registration and the annual liability, and it reviews accounts each year. For reporting periods January 2026 and after, the ST-1 instructions set monthly filing above an average monthly liability of $200, quarterly filing between $50 and $200, and annual filing under $50.
The band edges matter in practice. A client that averages a little over $200 a month files monthly, and a client that averages a little under it files quarterly.
Do not set the frequency yourself. Read it from the account, note the date, and check it each January. IDOR may change the frequency when the liability changes, and the notice, not the firm's calendar, controls the next return.
Due dates and the weekend rule
A monthly return and its payment are due on or before the 20th of the month after the reporting period. Quarterly returns are due on the 20th of the month after the calendar quarter ends, and annual returns are due January 20 after the calendar year. If the due date falls on a weekend or a state holiday, the return and payment are due the next business day.
The weekend rule catches firms that calendar the 20th without checking the weekday. When the 20th falls on a Saturday or Sunday, the due date moves forward, so put the actual due date in the calendar.
A return filed on time but paid late still draws a penalty, because the payment has its own due date. IDOR's instructions say a late-filing penalty applies when a processable return is not filed by the due date, and a late-payment penalty applies when the tax is not paid by the original due date. Publication 103 has the penalty and interest details.
Split state tax from local tax by location
The state general merchandise rate is 6.25%. Home rule, non-home rule, business district and mass transit taxes can be added on top, so the combined rate depends on the address. IDOR's instructions say a seller must collect and remit according to the rates of each particular location, not one rate for the whole business.
A filer with more than one site attaches Form ST-2 to Form ST-1, and the sites are combined on a single Form ST-1. Take a store where the state rate is 6.25% and a local layer sits on top. The tax for that site is the state share plus the local share, and both must trace back to the sales made at that address.
The common failure is one flat rate per state. The bookkeeper enters the state rate, and the store under-collects in a home rule city or over-collects in an unincorporated area. Store the rate with each location record, and check it against the Rate Finder for the month you are filing.
Report the 2026 local rate changes on Line 8a
Bulletin FY 2026-10-A says that effective January 1, 2026, certain taxing jurisdictions imposed local sales taxes or changed them. The affected taxes are business district, home rule municipal, Metro-East Mass Transit District and non-home rule municipal sales taxes. The bulletin says sales taxed at a rate different from the current one are reported on Line 8a of Form ST-1 and Form ST-2.
The bulletin also says the cash register and any computer program must be adjusted so that, beginning January 1, 2026, the correct tax is collected. A location whose point-of-sale rate was updated in February has January sales at the old rate, and those belong on Line 8a for the period.
The fix is a pull, not an estimate. Export January sales at the old rate by location from the point-of-sale system, enter them on Line 8a, and write a note in the workpaper naming the jurisdiction and the date the system was changed.
Destination sales need the customer's jurisdiction
For destination sales, the ST-1 instructions say receipts must be separated on Form ST-2 by the local tax jurisdiction, such as the city or county, where the customer is located. A report by store address does not meet that rule for these sales.
IDOR's requirements page says that beginning January 1, 2026, if the taxpayer fails to provide the information needed to determine where the sales were made, the gross receipts of those sales will be taxed at 15%. The page does not say how the rule applies to every seller, so confirm the facts with the firm's reviewer before applying it to a client's full book.
Capture the ship-to city, county and ZIP at checkout, and export sales by jurisdiction each period. Test one month by comparing the ship-to report to total taxable sales. Any difference is a sale with no location on file, and that gap is the exposure.
Vendor's discount and the payment schedule
The vendor's discount on Form ST-1 is 1.75% of the tax due or $5 per calendar year, whichever is greater. The discount is capped at $1,000 per month for returns due on or after January 1, 2025. For a small filer the $5 floor can be the larger amount, and for a filer with large monthly tax the $1,000 cap is what limits the discount.
Mandated electronic filers qualify for the discount only if they file electronically on or before the due date and pay the tax due on time.
IDOR's requirements page says that taxpayers whose average tax due on Form ST-1 is at least $20,000 a month must make four payments a month, due on the 7th, 15th, 22nd and the last day of the month. The same page also gives an annual figure for the electronic payment rule, so confirm with IDOR which threshold applies before you schedule the four payments.
The per-period checklist for the firm
Pull the period's sales from the point-of-sale system by location and by ship-to jurisdiction, and separate taxable sales from exempt sales. Tie the total to the processor reports, and keep the exemption certificate for each exempt sale with the period file.
Check the combined rate for each location in the Rate Finder for the month. Compute the tax per site, prepare the Form ST-2 for each multi-site location, and combine the totals on Form ST-1. Enter any Line 8a amount, then compute the vendor's discount and set the payment method.
File in MyTax Illinois or by paper, then save the confirmation with the workpaper. The file should show the frequency IDOR assigned for that year and the due date it produced, so the next preparer can see why the return was on that date.