As a retailer, am I allowed a discount from the sales tax I report on my Form ST-556, Sales Tax Transaction Return, and Form ST-556-LSE, Transaction Return for Leases?

Yes. The Retailers’ Occupation Tax Act and the Use Tax Act allow a retailer to claim a discount of 1.75% (.0175) of the retailers’ occupation and use tax collected, provided the retailer properly and timely files its Form ST-556, Sales Tax Transaction Return, or Form ST-556-LSE, Transaction Return for Leases, and pays the applicable tax by the due date. 35 ILCS 120/3; 35 ILCS 105/9; 86 Ill. Adm. Code 130.501-510; 86 Ill. Adm. Code 150.905.

Note: If a taxpayer files a claim for credit and the credit is approved with the 1.75% discount allowed for the approved amount, but the Illinois Department of Revenue subsequently determines that all or any part of the credit taken was not actually due to the taxpayer, the taxpayer’s 1.75% discount will be reduced by 1.75% of the difference between the credit taken and credit due, and that taxpayer will be liable for penalties and interest on the difference. 35 ILCS 120/3; 35 ILCS 105/9.

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