FY 2025-11, Retailers’ Allowance for Certain Transaction Returns Capped at $1,000 Per Month

Taxpayers who file Form ST-556, Sales Tax Transaction Return, and Form ST-556-LSE, Transaction Return for Leases, may claim a maximum discount amount of $1,000 per month in their ST-556/ST-556-LSE Sales Tax account. If a taxpayer files both Forms ST-556 and ST-556-LSE in a single month, both return types are subject to a combined $1,000 discount cap for the month.

Note: If amended returns are filed and the tax due increases, the discount may still not exceed $1,000 per month, and is allowed only if the increased tax reported was paid by the due date of the original return.

The $1,000 monthly cap applies to vehicle sales with a delivery date on or after December 12, 2024, which corresponds to returns due on or after January 1, 2025.

Yes. For returns due on or after January 1, 2025, retailers will no longer be able to reduce the tax remittance by the amount of the retailers’ allowance when filing Forms ST-556 and ST-556-LSE. To avoid potential billing and confusion, IDOR will calculate the discount on these returns through a monthly reconciliation process that will occur approximately 60 days after the end of a monthly liability period. The retailers’ allowance will be issued once the reconciliation process is completed each month.

If you are not mandated to file your ST-556 and ST-556-LSE returns electronically and file using paper Forms ST-556 and ST-556-LSE, do not use the retailers’ allowance line. You must remit all tax reported as due on your return to be issued the retailers’ allowance, as applicable, through IDOR’s monthly reconciliation process.

IDOR is working with vendors to ensure the proper changes are made to third-party software programs to address the discount cap.

Example:

Taxpayer A is a dealer of motor vehicles, trailers, watercraft, or aircraft, who is registered with IDOR with an active ST-556/ST-556-LSE Sales Tax account, and who is mandated to file and pay electronically. Taxpayer A files Form ST-556-LSE for lease transactions and Form ST-556 for vehicle sales. Taxpayer A files the returns below with delivery dates on and after December 12, 2024, and pays the taxes due by their due dates. Taxpayer A is entitled to a discount up to $1,000 for all ST-556 and ST-556-LSE returns filed during January, 2025.

• The taxpayer files both return types calculating the proper tax due and remits these taxes in full by the due dates.
• IDOR calculates the discount amount on each return during the monthly reconciliation process. The discount amount calculated by IDOR exceeds $1,000 for the month. Therefore, the discount amount issued to the taxpayer for the month is $1,000.

To expedite the refund process, you may sign up for direct deposit with the Illinois State Comptroller by calling (217) 557-0930 or visiting the Direct Deposit Sign Up webpage on the Comptroller’s website.

If you do not sign up for direct deposit, IDOR will issue you a check for the discount amount that you are due after the monthly reconciliation process is complete.