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General Sales Tax Distribution and Jurisdiction Questions

Are there other types of sales that have special circumstances which determine taxing jurisdiction?

Some of the common types of sales that have special circumstances surrounding the determination of taxing jurisdiction are listed below.                                                                                                                              

Do local governments receive a share of sales taxes?

Yes. Twenty percent of the state’s 6.25 percent sales tax rate on general merchandise and 100 percent of the state’s 1.00 percent sales tax rate on drugs and medical appliances is returned to local governments. For more information about sales tax distributions, please refer to the PIO-114 - How Sales and Use Taxes are Distributed.

Units of local government receive at least two warrants each month. Local governments with locally-imposed taxes will receive an additional warrant each month for each tax imposed.    

One warrant is for the local share of State sales tax on general merchandise and drugs and medical appliances sold in that unit of local government and the local share of State use tax collected on items of tangible personal property that are purchased outside Illinois from a retailer, and are required to be titled or registered at an address in that unit of local government.     

A second warrant is for the local share of State use tax on general merchandise (excluding items that must be titled or registered) and drugs and medical appliances. This second warrant is the unit of local government’s population-based disbursement from the State and Local Sales Tax Reform Fund. The distribution is based on the county or municipality’s population in proportion to the total state population. The population figures used are from the latest census conducted by the United States Bureau of the Census and certified by the Office of the Secretary of State. This portion is commonly referred to as the “local use tax.”   

In most instances, the monthly distribution represents that local government’s share of the tax paid on current returns. By that, we mean returns that are filed and paid on time and in full. For a sales tax return to be paid on time, it must be filed on or before the twentieth of the month following the end of the reporting period. For titled and registered property, returns are due no later than 20 days after the buyer takes possession of the item. In addition to the current returns, distributions will include taxes paid on late-filed returns, payments made for assessed liability (including penalty and interest charges or additional tax due resulting from a reporting error), and amended returns filed by taxpayers who are paying additional tax due.                                                                                                                                      

For locations imposing a local grocery tax effective January 1, 2026, a separate disbursement will be made at the same time as your other sales tax allocations.

Why does the amount of a local government’s sales tax distributions vary from month to month?

There are many reasons why the amount of sales tax distributions you receive varies from month to month. Retail sales of certain items may cause monthly distributions to fluctuate. Car sales and sales of building materials, for example, are known to increase with a strong economy and decline during difficult economic times. Businesses that make retail sales of big ticket items such as airplanes or mainframe computers pay large amounts of tax when they make sales, but these types of businesses do not maintain a consistent level of sales from month to month. Most taxpayers file their returns on a monthly basis. However, some businesses qualify to file on a quarterly or annual basis. The distributions in the months of June, September, and December reflect receipts reported by quarterly filers. The distributions in March will reflect your share of receipts by both quarterly and annual filers. Not every taxpayer files on a timely basis. If a taxpayer’s return is not received by the due date, the amount paid will not be included in a current distribution and may “double up” the amount of sales tax from their particular business for the following month. Audits completed on accounts, approved overpayments or claims for credit, and payments collected for additional liability also cause variance in distributions. In addition, a retailer may file amended returns either requesting a refund for overpayment of taxes, or paying additional liability. Either of these situations impact monthly distributions.