Back-to-School State Sales Tax Holiday August 7, 2026, through August 16, 2026

Retailers must adjust their method of collecting sales tax so that beginning on August 7, 2026, and ending at the close of business August 16, 2026, they will collect the reduced tax rate on qualifying items. The sales tax rate that must be used during the holiday period is the rate currently in effect on the date of the holiday minus 5.00 percent (5.00%).

For example:

* Retailers includes Retailers Maintaining a Place of Business making sales from outside of this State to Illinois customers. See Pub-113-D, Overview of Destination-based Sales Tax, for more information.

To determine whether the eligible clothing item’s retail selling price is below $125, retailers must look at the price after the unreimbursed coupon or store markdown but before a reimbursed coupon.

Qualifying items bundled with items that do not qualify for the State sales tax holiday rate will be subject to the reduced tax rate only if the value of the qualifying items exceed the value of the non qualifying items. Bundled sales are limited to $125 for one bundled sale that includes qualifying clothing/shoes.

Articles normally sold as a single unit must continue to be sold as such to determine whether the selling price is within the State sales tax holiday price threshold. For example, a pair of shoes with a selling price of $140 cannot be sold separately so the sales price of each shoe is within the sales tax holiday price threshold.

Qualifying items purchased during the holiday with a rain check issued prior to the State sales tax holiday will qualify for the reduced sales tax rate. Qualifying items purchased after the State sales tax holiday with rain checks issued during the holiday are not eligible for the reduced tax rate.

Retailers do not need to collect any additional tax if a customer purchases a qualifying item during the State sales tax holiday, but after the holiday exchanges it for a different size, color, or other feature at the same or lower price.

If a customer purchases a qualifying item during the State sales tax holiday, but after the holiday returns the item and receives credit on the purchase of a different item, they will receive credit for the holiday tax paid. The customer is charged the full sales tax rate on the purchase of a new item. If a customer purchases a qualifying item before the State sales tax holiday period, but returns it during the sales tax holiday period and receives credit on the purchase of a different item that is eligible, the reduced rate of sales tax is due if the replacement item is purchased during the holiday.

Regardless of when an item is delivered to a customer, the reduced rate of tax must be collected on any qualifying item for which a customer has paid in full during the State sales tax holiday period.

Retailers may establish their own policies for time periods within which to accept returns of qualifying items. However, for a 60-day period immediately after the Sales Tax Holiday Period, if a customer returns a qualifying item, the retailer must only credit or refund sales tax at the reduced rate unless the customer provides a receipt or invoice showing tax was paid at the usual general merchandise rate, or the retailer has documentation to show tax was paid at the usual general merchandise rate on the item. Retailers must file Form ST-1-X, Amended Sales and Use Tax Return (and, if applicable, Form ST-2-X, Amended Multiple Site Form), and Schedule K-12, Sales and Use Tax Holiday Schedule, to make a claim for credit for tax paid to IDOR that was subsequently refunded to a customer.

Schedule K-12, Sales and Use Tax Holiday Schedule, was created to report sales of qualifying items sold during the sales tax holiday. This schedule should be filed with your Form ST-1, Sales and Use Tax and E911 Surcharge Return (and, when applicable, Form ST-2, Multiple Site Form). Form ST-1 has not changed. Retailers should continue to report their normal taxable sales, including sales of qualifying items, on Lines 4a and 4b, Lines 6a and 6b, or Lines 12a and 12b, of Form ST-1 (and, when applicable, Form ST-2) and will then use Lines 2a and 2b, Lines 3a and 3b, or Lines 4a and 4b on Schedule K-12 to calculate a credit against the tax reported on those lines for the tax they are not collecting during the State sales tax holiday. When determining the discount allowed for a timely filed return, retailers are authorized to include the amount of tax on receipts that would have been due at the rate in effect for their location(s) prior to reducing the State’s portion of sales tax due on sales tax holiday items.

Printed by authority of the State of Illinois — Electronic only, One copy