Illinois Sales Tax on Invoices: A Practical Guide

Illinois's state sales tax rate is 6.25%. Local jurisdictions can add additional rates that vary widely, Chicago and Cook County have one of the highest combined rates in the United States at 10.25% (6.25% state + 1.75% Cook County + 1.25% city + 1.00% Regional Transportation Authority). Most Illinois suburbs are at 7.5%-8.5%; downstate areas often sit at the 6.25% state rate alone or with minor county additions. Illinois Department of Revenue publishes a sales tax rate finder at tax.illinois.gov.

From January 1, 2026, the only test is $100,000 or more in gross receipts from sales of tangible personal property to Illinois purchasers during the 12-month lookback period, checked every quarter. Illinois dropped its 200-transaction threshold on that date. A remote seller over the threshold collects State and local Retailers' Occupation Tax at the rate for the buyer's location (IDOR bulletin FY 2026-12).

Not at the state level. Illinois does not tax SaaS or other software that is only accessed remotely and never downloaded. Chicago is different: its Personal Property Lease Transaction Tax applies to cloud software used in the city, at 15% from January 1, 2026. Canned (prewritten) software is taxable in Illinois whether it ships on a disc or is downloaded, unless the license meets IDOR's conditions for nontaxable licensed software. At the state level this puts Illinois in the same camp as California and Florida: three of the largest states by GDP all exempt SaaS, while many smaller states do tax it.

ROT (Retailers' Occupation Tax) is the tax on a retailer's gross receipts from sales of tangible personal property. Illinois retailers owe it, and so does a remote seller over the $100,000 threshold, at the State and local rate for the buyer's location. Use Tax is owed by Illinois buyers on goods bought without Illinois tax; a remote seller under the threshold can collect it voluntarily. From the buyer's side both show up as sales tax on the invoice; the difference is in the seller's registration and return.

Generally no. Illinois exempts most professional and personal services: accounting, legal, consulting, design, freelance work, photography services, etc. are not taxed. Specifically taxable services in Illinois are limited: telecommunications, hotel occupancy (separate hotel tax), and a few others. Illinois has historically been one of the more service-friendly states, though there have been periodic legislative proposals to expand services taxation.

B2B sales to Illinois-registered resellers can be exempt with a valid CRT-61 Resale Certificate on file. The seller retains the certificate and applies zero tax on qualifying sales. The invoice should reference the buyer's Illinois Account ID Number and note 'Sale for resale; CRT-61 on file.' Illinois also accepts the multistate Streamlined Sales Tax (SST) Exemption Certificate.

Illinois Department of Revenue at tax.illinois.gov, the official tax authority. Look for: the Tax Rate Finder (for current combined rates by address), Publication 113 (Retailer's Overview of Sales and Use Tax and Prepaid Wireless E911 Surcharge), Form CRT-61 (resale certificate), and the MyTax Illinois portal for registration and filings.