Use Tax Questions and Answers

This series of questions and answers refers specifically to the use tax incurred on the purchase of general merchandise, food, and medical appliances that are not required to be titled or registered with another state agency. For items that are required to be titled or registered with another state agency, such as vehicles, watercraft, and aircraft, use tax is due and can be paid on the appropriate forms.  See instructions for Form RUT-25, Vehicle Use Tax Transaction Return, Form RUT-25-LSE, Use Tax Return for Lease Transactions, Form RUT-50, Private Party Vehicle Use Tax Transaction Return, and Form RUT-75, Aircraft/ Watercraft Use Tax Transaction Return. If you need to obtain Form RUT-25, RUT-25-LSE, RUT-50, or RUT-75 prior to registering the item, you can request copies be mailed to you by emailing our mail room or by calling the Illinois Department of Revenue's 24-hour Forms Order Hotline at 1-800-356-6302. Do not make copies of the forms prior to completing. These forms have unique transaction numbers that should not be duplicated. Doing so could delay processing.

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. Illinois, like most other states, imposes use tax on the privilege of using goods within their borders as a complement to sales taxes. 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.

You owe Illinois Use Tax if you purchase an item

• for use or consumption in Illinois,
• from an out-of-state retailer who charges no Illinois Sales Tax or charges sales tax at a rate lower than the Illinois rate, and
• on which sales tax would normally be collected if you bought it from a retailer in Illinois.

Examples include:

• purchases from an internet site that does not charge Illinois Sales Tax;
• catalog purchases from an out-of-state retailer who does not charge Illinois Sales Tax;
• purchases through an out-of-state home shopping television network that does not charge Illinois Sales Tax; and
• items purchased while you were
  • in another state from a retailer who charged sales tax at a lower rate than the Illinois rate or
  • in a foreign country.

In addition, if you purchase an item for use or consumption in Illinois from an Illinois retailer and you do not pay tax to the retailer, you owe Illinois Use Tax.

If you use goods in Illinois that were purchased tax free or at lower rates outside Illinois, you owe use tax to the department. If you do not pay, it is unfair to Illinois retailers, consumers, and taxpayers in the following ways:

• Illinois retailers, who must charge sales tax, are put at a competitive disadvantage as compared to out-of-state retailers, who charge no sales tax, or charge tax at rates less than Illinois rates.
• Illinois must make up these lost revenues or curtail state services provided to consumers and taxpayers.

Illinois is aggressively focusing upon collecting this tax.

• Illinois gathers sales information from other states and bills Illinois residents for unpaid tax, penalty, and interest.
• Illinois gathers information on overseas purchases from the U.S. Customs Service.

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 by following established protest procedures.

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 that claim to have medicinal value (such as aspirin and cough medicine, excluding nonprescription grooming and hygiene products), and
• medical appliances that replace a malfunctioning part of the human body (such as wheel chairs and hearing aids).

The use tax due date is based on how much use tax you owe.

If your total tax liability for the year is

• $600 or less, you may pay the tax for the entire year (January 1 through December 31) by filing
  • Form ST-44, Illinois Use Tax Return, on or before April 15 of the following year; or
  • Form IL-1040, Individual Income Tax Return, on or before April 15 of the following year (for tax years ending December 31, 2010 and after).
• Greater than $600, you must pay the tax by the last day of the month following the month in which the purchase was made by filing Form ST-44, Illinois Use Tax Return.

Generally, individuals, organizations, and unregistered businesses must report and pay use tax directly to the Illinois Department of Revenue using Form ST-44, Illinois Use Tax Return.

You may report and pay any use tax due for purchases you made during that particular filing year if the amount of use tax due for the year is not over $600.

If you are a registered Illinois retailer or serviceperson, and currently file Form ST-1, Sales and Use Tax and E911 Surcharge Return, you must report and pay use tax on that form.

• Businesses that purchase items tax free for use or consumption in Illinois should use the return whose liability period corresponds to the purchase date of the items for which use tax is due.
• Businesses that purchase items tax free for resale and later remove these items from inventory for use or consumption in Illinois should use the return whose liability period corresponds to the date the item was removed from inventory.

Payments can be made, with the filing of a return, by

• Cash,
  • Cash is only accepted at the following two Illinois Department of Revenue locations:
    • the cashier and deposit office located on the 11th floor at 555 West Monroe Street, Chicago, IL 60661, or
    • the cashier’s office in the Willard Ice Building, 101 West Jefferson Street, Springfield, IL 62702.
• Check,
• Guaranteed remittance, or
• ACH Debit.

Yes, we do allow credit for taxes properly due and paid to other states. However, if you pay tax to another state at less than the Illinois Use Tax rates, you must pay Illinois the difference.

No, you are not allowed credit for any taxes paid to foreign governments. These purchases are subject to the full Illinois tax rates.

No. Use tax is due regardless of whether an item has to be declared or is subject to a duty tax.

Yes, you can report use tax electronically, but only in certain instances. If you owe less than $600, you can use Form IL-1040 to report and pay your use tax, using MyTax Illinois. Before you begin, you must have the following:

• SSN – Social Security number
• IL-PIN – Illinois Personal Identification Number (You can use our IL-PIN Inquiry to see if an IL-PIN has been assigned to you, or call 1 800 732-8866.)

You cannot report cigarette use tax electronically. You must file Form RC-44 to report and pay your cigarette use tax, using a paper return.

If you do not have use tax to report on your Form IL-1040, either because you have no use tax liability or because you are filing and paying your use tax using Form ST-44, enter “0” on the use tax line on your IL-1040.

No. You do not need to file Form IL-1040-X to correct your use tax if it was originally reported on your Form IL-1040. Instead, you can do either of the following:

• Send written correspondence to
  ILLINOIS DEPARTMENT OF REVENUE
  PO BOX 19084
  SPRINGFIELD IL 62794-9084
• Fax correspondence to 217 557-5353

Send a copy of the Return Correction Notice along with the requested documentation and a signed, written request detailing the correction requested.

Send written correspondence to:

You can also fax your correspondence to 217 557-5353.

No, you should send in a signed, written request detailing the correction requested. If you are filing an amended return for a separate reason, attach the completed Form IL-1040-X and any attachments to the back of the use tax correction request. Both should be mailed to

No. Items purchased for use in Illinois by an exempt organization in support of its organizational purpose qualify as sales-tax exempt purchases if the exempt organization has applied for and received an exemption identification number (“E” number) from the Illinois Department of Revenue.  Examples of exempt organizations are

• units of government,
• churches,
• charities,
• schools,
• county fair organizations, and
• certain senior citizen organizations

No. Items purchased for use in Illinois from persons who make isolated or occasional sales and who are not engaged in the business of selling tangible personal property at retail are not subject to use tax.