Accounting Articles > Illinois Sales and Use Tax Audit:

What is sales tax?

Sales tax or what Illinois tax law calls Retailers Occupation Tax is imposed on persons engaged in selling tangible personal property at retail. The tax is measured on the gross receipts of a business.

The frequency with which this tax is payable is determined by the state. Some retailers are required to file and pay this tax monthly, some are quarterly, some are required annually. This depends on the amount of retail sales tax generated and collected by the business.

The tax is due by the 20th day of the month following the end of the taxation period. An example would be if you are responsible for filing and paying your sales taxes monthly, then the return is due by the twentieth day of the following month.

Sales tax is due only on tangible personal property. It is not due on intangibles such as a service or freight.

Sales tax is also only due on sales that are delivered inside the State of Illinois. If a customer from Milwaukee orders a bracelet from one of the jewelers down on South Wabash, and the item is shipped to Wisconsin, the jeweler is not required to collect or remit Illinois Sales Tax. In this transaction the customer in Wisconsin would be responsible for their own state's use tax.

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