Illinois sales tax on invoices (2026 guide)

Illinois's general state sales tax rate is 6.25% on general merchandise (1% on qualifying drugs and medical appliances). Cities, counties and other local bodies add their own taxes, so the rate you charge depends on the location.

Illinois uses slightly unusual terms: what most people call "sales tax" is really a combination of occupation taxes (paid by the seller) and use taxes (owed by the buyer). For invoicing purposes, the result is familiar — you collect tax on taxable sales and show it on the invoice.

Illinois sales tax rates

Rate	Applies to
6.25%	General merchandise (state rate)
1%	Qualifying drugs and medical appliances (state rate)
Local taxes	Added on top by the location

The Illinois Department of Revenue doesn't publish one list of every combined rate. Instead it offers the Tax Rate Finder on MyTax Illinois, which looks up the rate for a specific address, including locally imposed taxes.

Does Illinois tax services?

Here's the key rule, straight from the Department: Illinois does not tax sales of service. A consultant, designer, writer or coach selling only their time and expertise doesn't charge Illinois sales tax on that work.

The exception is tangible personal property transferred as part of a service. Illinois imposes Service Occupation Tax on those items — for example the parts a repair technician installs, or materials a service provider hands over to the customer. A 2026 bulletin confirms that "the service component of a sale of service remains nontaxable", while the property transferred with it can be taxed.

What this means for your invoices:

• Pure services: no Illinois sales tax.
• Goods you sell: taxable at the rate for the location.
• Services that include parts or materials: separate the parts from the labor on the invoice so the tax is calculated correctly.

Registering in Illinois

Businesses that sell taxable goods register with the Illinois Department of Revenue — the Department's online portal, MyTax Illinois, handles registration, filing and verification. Your registration gives you an Illinois account ID, which you'll use on returns and certificates.

What an Illinois invoice should show

• your business name and address,
• the customer's name and address,
• a unique invoice number and invoice date,
• each item or service with its price — with parts and labor on separate lines for service work,
• sales tax as a separate line, with the rate, and
• the total due.

In Invoice Native, add labor and parts as separate lines and tick Tax only on the taxable ones.

Resale certificates in Illinois

Businesses that buy items to resell give you a Certificate of Resale — the Department's form is CRT-61. Before you accept it:

• verify the buyer's account ID using the "Verify a Registered Business" tool on MyTax Illinois,
• keep the certificate for at least three and one-half years, and
• ask for an updated certificate at least every three years.

For other exempt customers, such as qualifying nonprofits, keep their exemption information on file and note it on the invoice. See how to invoice a tax-exempt customer.

Invoicing service work in Illinois

Because Illinois taxes the property transferred with a service rather than the service itself, service businesses need tidy invoices. A repair technician, for example, might invoice:

• Diagnostic and repair labor — not taxable as a service,
• Replacement parts — subject to Service Occupation Tax, and
• Trip charge — a service fee.

Keeping parts on their own lines, with descriptions and quantities, makes it clear which amounts the tax applies to. How the tax base is calculated for servicemen can depend on how they're registered, so check the Department's guidance for your situation.

Selling to customers in other states

If you ship goods or deliver taxable services to customers in another state, that state's rules may apply instead of Illinois's. Since the Supreme Court's 2018 decision in South Dakota v. Wayfair, states can require out-of-state sellers to register and collect their sales tax once sales into the state pass a threshold the state sets. If you sell across state lines regularly, check the thresholds and registration rules of each state you sell into — and use that state's rate on those invoices.

Common mistakes on Illinois invoices

• Charging sales tax on pure services such as consulting, design or writing.
• Lumping parts and labor into one line on repair and installation jobs.
• Using the state rate alone instead of the location's combined rate from the Tax Rate Finder.
• Accepting a resale certificate without verifying the account ID on MyTax Illinois.
• Letting certificates go stale — update them at least every three years.

Quick checklist for Illinois invoices

• ✅ Registered with the Illinois Department of Revenue
• ✅ Rate from the Tax Rate Finder for the location
• ✅ No tax on pure services; parts and labor on separate lines
• ✅ Sales tax shown as a separate line
• ✅ CRT-61 certificates verified and kept for 3½ years