Set up Illinois returns

Add Illinois to the places where you collect tax. This tells AvaTax to calculate tax on Illinois transactions. Illinois is an origin-based sales tax state. However, sales made into the state from a location outside of the state are charged a flat use tax rate. See the Illinois Department of Revenue website for details about nexus, registration, and taxes in Illinois.

Before you add Illinois, there are two things you need to do:

• Make sure you have nexus in Illinois. In some states, you may have economic nexus if you're a remote seller.
• Register with the Illinois Department of Revenue. You may need to register with local jurisdictions as well as the state. 

Illinois has both sales and sellers use tax. When you add Illinois, pick the right tax type based on the way your business is registered and the tax return you need to file.

Find your business scenario below to determine which tax type you need to select:

"Sourcing" determines the location where a sale is taxed. Illinois is an origin-sourced state, unless your business is a Remote Seller that is required to collect by destination because you've exceeded the remote seller threshold.

Effective January 1/1/2021, the threshold for the new remote seller requirement of reporting at destination rates applies to business that meets one of the following:

• The cumulative gross receipts from sales of tangible personal property from purchasers in Illinois are $100,000 or more
  OR
• The remote retailer enters into 200 or more separate transactions for the sale of tangible personal property to purchasers in Illinois.

Refer to this FAQ for further information on these 2021 tax legislation changes.

Add any physical locations you have in Illinois. This is important for reporting on your return.

When you add a location:

• Enter the three-digit, state-assigned Site/Number Code under Additional Information
• Enter the eight-digit, state-assigned Location/Jurisdiction Code under Additional Information
• After you validate the location address, make sure it falls in the jurisdictions you expect. If not, you may want to manage your jurisdiction overrides. 

The state-assigned site/number code is a three-digit code the state assigns to your location when you register the location with the state. Enter 3 digits, for example "001".

The state-assigned location code is an eight-digit jurisdiction assignment provided by the state. Enter the location/jurisdiction code in the correct format. Example: 022-0065-1

• If you have only one physical location, the origin address for in-state sales should match the registered location. Otherwise, the correct rate may not be used for filing. You may have sales from out of state as well as sales from the physical location. However, all in-state sales should be reported to the single physical location.
• If you have a physical location that closes or moves, update your registration with the state and then update the location information in AvaTax.
• If you are a Remote Seller reporting to changing locations or non-physical locations, you don't need to set these up in AvaTax. Changing locations and non-physical locations are reported by state assigned codes, which are determined by the destination address of transactions. 

You must submit Form IL-8633-B Business Electronic Filing Enrollment in order for Avalara to file your returns with an electronic signature. Complete the highlighted sections of the linked form for your business. Make sure you use this partially-completed form, because it includes required information such as a point of contact at Avalara, tax type, and the AVA259 signature code on line 15. The state will not accept electronically-filed returns if the IL-8633-B form is missing any of this information. 

Once you've completed the form, email it to REV.IL8633B@illinois.gov.

Once you have received confirmation via email that the state has accepted and processed your IL-8633 form, you may add IL in your scheduled returns. Returns filed without this form on file or successfully processed with the state may be subject to a penalty.

• NOTE: A social security number (SSN) isn't required to submit this form
• You do not need to provide a copy of the IL-8633 confirmation email to Avalara

All tax types are reported on a single Illinois sales and use tax form. Confirm your filing frequency on the registration information provided by the state.

• Select form IL ST-1, which is Sales and Use Tax and E911 Surcharge Return, to report all tax types.
  Some businesses are also required to file the ST-2 multiple site form along with the ST-1 return.
  • If you're required to file the ST-2 form, you can indicate this when you add the IL ST-1 return.
  • You may be required to file the ST-2 form if:
    • You have more than one physical in-state location
    • Your business is a Remote Seller required to report by destination jurisdictions with changing locations or non-physical locations
• Make sure you enter your Illinois registration ID correctly. Example: 1234-5678
• Enter your login credentials for the MyTax Illinois website
• Under some circumstances, taxpayers are required to make quarter-monthly payments to the state
  • If you're required to make quarter-monthly prepayments, you must make these payments yourself, and then enter the amounts of the payments you made on the Manage and Approve Returns page prior to approving each month. Avalara can't make these payments for you.
  • Learn more about Illinois prepayments or contact the Illinois Department of Revenue at 800-732-8866 or 217-782-3336 for more info

To allow Avalara to request third party access and make payments to the account, perform the following steps:

1. Enter your login credentials for the MyTax Illinois website.
2. On the landing page, click Manage My Profile.
3. Click More.
4. Under the Access section, click Manage Third Party Access.
5. By default, the Third Party Access is set to No.
6. Click No, a pop-up message Are you sure you want to allow third party logons? is displayed. Click Yes.
7. By default, the Default Account Access is set to File. Change it to File & Pay or Full Access.

Do you have an overpayment balance on your Illinois Sales and Use Tax account?

You may use any approved balance as payment towards a future return. We encourage you to verify any credit balances are still valid and available for use on future returns with the jurisdiction(s) before your returns are approved on the 10th of each month. In the event that the state disallows the use of the credit on a return, any required amendments, associated penalties and interest, and additional balances due would be the responsibility of your organization to resolve directly with the jurisdiction. To utilize a state-approved credit balance to reduce the amount due on your return, add the credit amount in the Details and adjustments section of your Illinois return.

1. Go to Returns > Approve returns. Find the region where you want to adjust tax liabilities and then select Show details.
2. Find the return you want to adjust and then select Details and adjustments.
3. Select Add adjustments and enter the Jurisdiction Issued Credit amount as a negative figure.

NOTE: The credit amount entered must not exceed the total tax liability after the discount. For example, if your tax liability is $100 and your discount is $10, the amount of the jurisdiction issued credit can be a maximum of $90.