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Set up Illinois returns

This article applies to:Returns Central

Tell us where you collect tax

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:

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:

Business scenario Select this tax type What you need to know about transactions

Remote sales (above threshold)
Out-of-state sales equal to or above $100K, or 200 transactions per year

Sales tax only
This is required to force AvaTax to tax all transactions at destination rates for all Out of state origin transactions

Changing location reporting only - origin of transactions/sales are Out of state or duplicate destination address and are required to be reported at destination non-physical locations

Remote sales (below threshold) 
Out-of-state sales below $100K, or 200 transactions per year

Sales or sellers use tax
All transactions should have an out-of-state origin address to ensure that sellers use tax 

Origin address is not in IL

Physical location and remote sales
Without remote seller requirement (assuming remote seller threshold doesn't apply) 

Sales or sellers use tax

  • In-state: A corresponding IL physical location is registered and set up in AvaTax. That location code is passed on transactions for location assignment that have the in-state address as the transaction origin.
  • Out-of-state sales to be reported on lines 6/7A: Origin of transactions is not in IL and only taxed at 6.25% for general sales, and 1% for food drug and medical.

Changing locations or non-physical locations
Temporary or traveling presence in jurisdiction where sales are made

Sales tax only

Single-location transactions, meaning that the origin and destination addresses are the same.

Changing locations, non-physical locations, and remote sales
Temporary or traveling presence in jurisdiction where sales are made and out-of-state sales

Sales or sellers use tax

  • Changing locations: Sales to changing locations should be single-location transactions, meaning that the origin and destination addresses are the same.
  • Out-of-state sales: Sales with an origin address not in IL are calculated at the state rate only.

Physical location, changing locations, and remote sales
Physical registered location (ex. warehouse), temporary presence, and out-of-state sales

Sales or sellers use tax

  • Physical locations: Transactions that require reporting to a registered physical location need to have a location code passed in the data that correspond to a location that you've added in AvaTax.
  • Changing locations or non- physical locations: These should be single-location transactions, meaning that the origin and destination addresses are the same. A location code is not required.
  • Out-of-state sales: Sales with an origin address not in IL are calculated at the state rate only. A location code is not required.

Physical location and non-physical or changing locations
Warehouse, temporary presence

Sales tax only

Transactions that require reporting to a registered physical location will need to have location codes passed in the data that correspond to a location setup in AvaTax.

Sales for non-physical or changing locations are assigned based on state assigned codes for transactions that are not assigned an AvaTax location code.

Marketplace seller with direct sales
Sales through a marketplace do not apply to threshold determinations. Only direct sales from your business contribute to the threshold requirement. Refer to the previous scenarios to determine the correct direct sales reporting requirements.

Select the appropriate tax type based on direct sales reporting criteria

Marketplace sales are automatically be excluded from the IL return. Sales that are reported by a marketplace facilitator should not be included with direct sales reporting.

"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 your company locations

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. 

Submit form IL-8633-B

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. We have filled in some of the information already including a point of contact at Avalara, tax type, and the signature code. Email the completed form 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. 

Schedule your returns

After you tell us where you collect tax and add locations, you're ready to schedule returns. Go to Returns in AvaTax to provide a funding power of attorney and schedule your returns

Your company name and taxpayer ID from Your Company Details show up on your returns. Make sure they match what’s on your registration information.

Use this info to schedule your returns. Keep in mind that the selections you made when you told us where you collect tax, any location codes you entered, and the forms you select are related and should tie together.

A warning icon

Warning

Make sure that you've submitted a completed copy of Form IL-8633-B Business Electronic Filing Enrollment to REV.IL8633B@illinois.gov. Failure to complete this form can results in penalties from the IL Department of Revenue.

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 if you don't have any in-state locations or you only have one physical in-state location
  • Select form IL ST-1 ST-2 if you have more than one physical in-state locations or if 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 web site
  • Under some circumstances, taxpayers are required to make quarter-monthly payments to the state

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 Tax Details and Adjustments section of your Illinois return.

  1. Go to Returns > Manage and Approve Returns. Find the region where you want to adjust tax liabilities and then select Manage Returns.
  2. Find the return you want to adjust and then select Tax 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.

Additional forms supported by Managed Returns Premium

For customers who have upgraded to Avalara Managed Returns Premium, the following forms are also supported:

To learn more about the benefits of Managed Returns Premium, contact your Account Manager.

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