Illinois Use Tax for Individual Taxpayers

              Illinois Department of Revenue
Illinois Use Tax for Individual Taxpayers
Do you owe use tax?
• Did you buy goods outside Illinois to use or consume in Illinois?
• Would they have been taxable in Illinois?
• If you bought goods within the United States, did you pay less sales tax than you would have paid in Illinois?
If you answered “yes” to these questions, you may owe Illinois Use Tax.
What is use tax?
Use tax is a form of sales tax designed to distribute the tax burden fairly among consumers and assure fair competition between
in-state and out-of-state businesses. In general, states that impose sales taxes also have complementary use taxes on the privilege
of using goods within their borders. This tax applies to individuals, businesses, and organizations.
Illinois law requires you to pay tax at Illinois rates on purchases you make for use or consumption in Illinois
• when you buy goods from businesses located outside Illinois and bring them into Illinois or
• when you have the goods delivered to you from businesses located outside Illinois.
Does the duty tax I paid to the U.S. Customs Service replace use tax?
No. Use tax is due whether or not an item has to be declared or is subject to a duty tax.
Why should I voluntarily pay use tax?
Using goods purchased tax free or at lower rates outside Illinois is unfair to retailers, consumers, and taxpayers in the following
ways:
• Illinois retailers, who must charge sales tax, must compete with out-of-state retailers, who may charge no sales tax or charge
tax at rates less than Illinois rates.
• Illinois must make up lost revenues or curtail state services provided to consumers and taxpayers.
Illinois is aggressively focusing upon collecting this tax.
• Illinois shares sales information with other states and bills Illinois residents for unpaid tax, penalty, and interest.
• Illinois gathers information on overseas purchases from the U.S. Customs Service.
By voluntarily paying, on time, all of the Illinois Use Tax you owe, you will avoid being billed for unpaid tax and additional penalty
and interest charges.
The Illinois Department of Revenue can assess use tax owed by taxpayers who do not pay voluntarily. For taxpayers who do
not have records to document their use tax liability, the department will estimate liability. Taxpayers have the right to refute the
department’s estimates.
What are the Illinois Use Tax rates?
Illinois Use Tax rates are 6.25 percent of the purchase price of general merchandise and 1.00 percent of the purchase price of
qualifying food, drugs, and medical appliances.
The 1.00 percent rate applies to
• food that has not been prepared for immediate consumption (such as most food sold in grocery stores, excluding hot foods,
alcoholic beverages, candy, and soft drinks),
• prescription medicines and nonprescription items claimed to have medicinal value (such as aspirin and cough medicine,
excluding nonprescription grooming and hygiene products), and
• prescription and nonprescription medical appliances that replace a malfunctioning part of the human body (such as wheel
chairs and hearing aids).