Pub-113-SOT, Requirements for Servicepersons who File Form ST-1

1. How do Servicepersons calculate their tax liability?
2. On what transfers of TPP incident to sales of service must I collect and pay SOT?
3. What are some common types of transfers of TPP incident to a sale of service that are exempt from SOT?
4. What factors determine the rate that applies to the transfer of TPP incident to a sale of service?
5. How do I know what rate to charge?
6. What taxes are included in the tax rate?
7. Where can I get a list of sales tax rates?
8. When does an Illinois Serviceperson owe UT on its purchases and how is it reported?
9. How do I file if I have transfers of TPP incident to sales of service at more than one location?
10. Must I file Form ST-1 even if I have no sales of service or purchases to report?
11. When is my return and payment due?
12. Is there an incentive for paying the tax I have collected on time?
13. How do I file my return?
14. What if I do not file and pay by the due date?
15. Can I pay electronically?
16. What if I collect tax at a higher rate than I am required to collect?
17. What if I make a mistake on my return?
18. Where can I find additional information on SOT, marketplace facilitators, destination-based sales tax, and proper SOT filing practices?

The service component of a sale of service remains nontaxable. The only part of a sale of service that is taxable is the transfer of TPP as part of that sale of service. Except in the case of sales made through a Marketplace Facilitator who meets the Tax Remittance Threshold, a Serviceperson’s liability may be calculated in one of four ways:

1. SOT on separately stated Selling Price of TPP transferred as an incident of a sale of service;
2. SOT on 50%, but not less than the cost price, of the Serviceperson’s entire bill;
3. SOT on the Serviceperson’s cost price if they are a De Minimis Serviceperson who is registered or otherwise required to be registered under Section 2a of the ROTA; or,
4. UT on the Serviceperson’s cost price if they are a De Minimis Serviceperson not otherwise required to be registered under Section 2a of the ROTA.

Notes:

1.  Any Serviceperson whose only Illinois presence as a result of meeting the $100,000 in gross receipts from sales of service threshold cannot elect the fourth calculation option above if the Serviceperson makes any retail sales to purchasers in this State.

2.  SOT shall be imposed at 50%, but not less than the cost price, of the entire billing to the Illinois purchaser for all sales of service as a part of which TPP is transferred through a Marketplace that has met the tax remittance threshold to Illinois purchasers.

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A Serviceperson who is registered for SOT or required to be registered for SOT with IDOR must collect SUT from its customers and pay the SOT to IDOR on all transfers of TPP incident to sales of service unless the transaction is exempt from SOT by law. A De Minimis Serviceperson who is required to pay UT on the cost of TPP transferred incident to sales of service must pay UT to IDOR on all transactions that are not exempt from SOT by law unless the UT was collected from the Serviceperson by the supplier who sold it the TPP. The Serviceperson who pays UT does not collect SOT or UT from its customers.

You must keep documentation in your records to support every exempt transfer of TPP incident to a sale of service you make.

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Listed below are some of the most common transfers of TPP incident to sales of service that are exempt from SOT:

• sales for resale;
• interstate commerce;
• enterprise zone;
• high impact business;
• river edge redevelopment zone building materials; and
• exempt organizations (e.g., exclusively charitable, religious or educational).

For more information, see PIO-101, Illinois Sales & Use Tax Matrix.

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Generally, it is the location of the selling activity where you make the sale of service that determines the rate of tax. The rate of tax that applies to transfers of TPP incident to a sale of service made within Illinois varies based on the selling activities. For sales of service for which selling activities occur in Illinois, State and local SOT are incurred at the tax rate in effect at the location of the selling activities (origin rate). See 86 Ill. Adm. Code 270.115 for more detail.

For sales of service that are fulfilled from inventory located in Illinois and for which selling activities do not otherwise occur in Illinois, State and local SOT are incurred at the tax rate in effect at the location of the Illinois inventory (origin rate).

For sales of service that are not fulfilled from inventory located in Illinois and for which selling activities do not otherwise occur in Illinois, State and local SOT are incurred at the tax rate in effect at the location to which the TPP is shipped or delivered or at which possession is taken by the purchaser (destination rate).

Marketplace Facilitators that meet the Tax Remittance Threshold are deemed to be Servicepersons engaged in the business of making sales of service on behalf of their identified marketplace sellers at the destination rate. SOT shall be imposed at 50%, but not less than the cost price, of the entire billing to the Illinois purchaser for all sales of service as a part of which TPP is transferred through the Marketplace to Illinois purchasers.

Marketplace Facilitators will still be required to remit SOT for their own transfers of TPP incident to a sale of service at:

• the origin rate for transfers of TPP incident to a sale of service that is sourced in Illinois or for sales of service that are not sourced in Illinois, but the inventory is in Illinois (at the time of the sale of service); and/or
• the destination rate for transfers of TPP incident to a sale of service that are sourced outside of Illinois. 

Leases or rentals with periodic payments and delivery to the customer will be sourced using the destination rate. For all other leases or rentals, including a lease or rental that does not require recurring periodic payments and any lease or rental in which the customer takes possession of the property at the lessor’s place of business, the payment is sourced as otherwise provided for sales of service.

See our Destination-Based Sales Tax Assistance page for more information.

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Taxpayers electronically filing Form ST-1, and, if applicable, Form ST-2, using MyTax Illinois will have the rates populated for them.

If you receive a paper return, the rate will be preprinted, and if you make taxable sales of service from more than one location, the rate for each location will be printed on your Form ST-2.

If the rate is not shown, refer to the Tax Rate Database to verify your rate.

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If you transfer TPP incident to a sale of service, your tax rate consists of:

• the statewide general merchandise tax rate of 6.25 percent (.0625); plus
• any locally imposed taxes collected by IDOR on general merchandise.

Depending on the location of your sales of service, the following additional locally imposed taxes collected by IDOR may be included in your tax rate:

• Regional Transportation Authority (RTA)* tax rate - sales of service in Cook, DuPage, Kane, Lake, McHenry, and Will counties.
• Metro-East Mass Transit District tax rate - sales of service in Madison and St. Clair counties.
• Home-rule, non-home rule, County School Facility, County Public Safety/Public Facilities/Transportation Sales Tax, Metro-East Park and Recreation District Tax rate - sales of service within certain units of government.
  • Home-rule, non-home-rule, County School Facility/County Public Safety/Public Facilities/Mental Health/Substance Abuse/Transportation Sales Tax, and Metro-East Park and Recreation District taxes do not apply to sales of drugs or groceries, or sales, leases, or rentals of medical appliances or items that must be titled and/or registered.

Local governments may also impose taxes that they administer themselves using a form of their own.

*Note: Beginning June 1, 2026, the RTA will be known as the Northern Illinois Transit Authority (NITA).

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For a complete list of all sales tax rates, go to the Tax Rate Database.

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For Form ST-1 filers, Illinois law requires you to pay Illinois UT on purchases of TPP you made for use or consumption in Illinois and on which you did not pay Illinois UT to the seller. De Minimis Servicepersons are also required to pay UT on the cost price of purchases of TPP transferred incident to a sale of service, unless their supplier collected UT from them. You must report UT on your Form ST-1.

Businesses that owe UT on items purchased for their own use or consumption by the business and not transferred incident to sales of service in Illinois should pay UT using Form ST-1 for the reporting period in which the items were purchased.

Businesses that purchase items tax free for resale to transfer as an incident of sales of service and later remove these items from inventory for the business’s own use or consumption in Illinois should pay UT using the Form ST-1 for the reporting period in which the item was removed from inventory. The Illinois UT rate is 6.25 (.0625) percent for general merchandise and 1 percent (.01) for drugs and medical appliances. If you paid the correct tax to another state but the tax you paid is lower than the Illinois rate, you must pay IDOR the difference.

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A Serviceperson who is liable for SOT and transfers TPP incident to sales of service at more than one location (site) or local tax jurisdiction (e.g., city or county) where the customer is located for destination-based sourcing must collect and remit taxes according to the rates of each selling activity. The Serviceperson will be registered as a multiple location filer and must complete and attach Form ST-2 to your Form ST-1 to show the breakdown of taxes collected and paid from each site. See Sales & Use Tax Form Instructions for more information.

For destination-based transactions, if the taxpayer fails to provide the information, schedules, or supporting documents necessary to determine the destination location, IDOR shall assess tax on the gross receipts of such sales at the rate of 15%. Taxpayer records must support figures filed on Form ST-1 and Form ST-2.

For more information, see FY Bulletin FY 2026-13, Service Occupation Tax Changes.

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Yes, if you are required to be registered or are voluntarily registered with IDOR. You must file a processable (signed) Form ST-1 for each reporting period regardless of whether there are receipts or purchases to report. If you have no receipts to report, you must file a “zero” return.

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You must file your Form ST-1 and pay any tax, E911 Surcharge, and ITAC Assessment on or before the 20th day of the month following the end of the reporting period. Due dates that fall on Saturdays, Sundays, and State of Illinois holidays are moved to the next business day.

For most taxpayers, the reporting period is over at the end of the month and the return is due on or before the 20th day of the month following the end of the reporting period.

Some taxpayers qualify to file only four times a year (quarterly). These taxpayers’ returns are due on the 20th day of the month following the end of the calendar quarter. Still other taxpayers qualify to file only once a year (annually).

These taxpayers’ returns are due on the 20th day of January following the end of the calendar year.

Upon registration, you will be required to file either monthly or quarterly. IDOR reviews accounts annually and will notify you if your filing status changes.

Taxpayers whose average tax due on Form ST-1 is at least $20,000 a month must make four tax payments each month and must make them electronically. Payments are due on the 7th, 15th, 22nd, and last day of the month. IDOR will notify you if you meet this requirement. At the time of notification, IDOR will send you information explaining specific filing requirements.

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Yes. A Serviceperson that files its own returns and makes payment of tax shall be entitled to a discount for all sales that it timely files returns and makes payment of tax as required by Section 9 of SOTA. However, the Serviceperson is not entitled to the discount for sales reported on returns filed by a Certified Service Provider with whom it has a Tax Remittance Agreement or sales made over a Marketplace.

A Marketplace Facilitator shall be entitled to a discount as provided in Section 9 of the SOTA on all Marketplace sales made to Illinois purchasers on behalf of marketplace sellers or Servicepersons.

The discount amount, including any local tax administered by IDOR and reported on the same return, is capped at $1,000 per month. For more information on the applicable discount rate, see Form ST-1 Instructions.

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You can file Form ST-1, and, if applicable, Form ST-2, electronically with special attachments using MyTax Illinois. Forms ST-1 and ST-2 also can be electronically filed using software you write or that you buy or use from an accepted vendor (third party). See the list of approved third party software vendors to electronically submit these forms. These vendors may charge a transaction fee. If you electronically file using your own software, you must first obtain IDOR approval.

For paper forms, mail your return to the address on the form. If no address is available, mail your Form ST-1 to:

ILLINOIS DEPARTMENT OF REVENUE
RETAILERS’ OCCUPATION TAX
SPRINGFIELD IL 62796-0001

If you are required to file other tax returns than Form ST-1, do not mail these returns to the same address you use for your Form ST-1. Instead, you can file using MyTax Illinois or mail your other return separately, sending it to the appropriate address on the form. IDOR also provides a list of mailing addresses.

Note: You will be mandated to file Form ST-1 electronically if your annual gross receipts average $20,000 or more. IDOR will notify you by mail if your filing status changes.

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If you do not file your return and pay tax by the due date, you will be assessed for any tax due (including any portion of the discount for timely filing that IDOR has disallowed) plus penalty and interest. For detailed information about the penalties and interest that may apply, see Publication 103, Penalties and Interest for Illinois Taxes.

Note: IDOR uses the U.S. Postal Service postmark date to determine whether a return and payment have been timely filed on items sent through the U.S. mail to IDOR. Private postage meters are not used to establish the date of receipt.

Note: The United States Postal Service (USPS) has announced changes to postmarks. For more information, see FY 2026-17, Changes to United States Postal Service on Postmarks Could Impact Illinois Tax Filings.

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Yes, you can use MyTax Illinois or ACH Credit to make electronic payments.

Taxpayers whose average tax due on Form ST-1 is at least $20,000 annually must make payments electronically. IDOR will notify you by mail prior to August 1 if you are required to make your payments electronically. At the time of notification, IDOR will send you information explaining specific payment requirements. This notification will further explain the requirements and outline the payment options you may use.

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If you do not refund the over-collected tax to your customer before you file Form ST-1, you will need to report and pay any over-collected tax on the excess tax line of Form ST-1. If you refund the over-collected tax after you have filed your return, you will need to file Form ST-1-X, Amended Sales and Use Tax and E911 Surcharge Return, to receive your credit.

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If, after you file your Form ST-1, you find you made a mistake that resulted in an overpayment or an underpayment, or you forgot to send any necessary attachments, you must file Form ST-1-X. If you filed Form ST-1 electronically using MyTax Illinois, you can use that system to also file your Form ST-1-X. Otherwise, you must file a paper Form ST-1-X. Forms are available at tax.Illinois.gov.

For help, visit tax.Illinois.gov or call weekdays between 8:00 a.m. and 5:00 p.m. at 800-732-8866, 217-782-3336, or 800-544-5304 (TTY).

If you have a specific question about an amended return you have already filed, call us at 217-782-5906.

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For more information about SOT, marketplace facilitators, destination-based sales tax, and filing requirements, refer to the following pages:

• Sales & Use Tax Forms
• Sales & Use Taxes information page
• Out-of-State Sales Resource Page
• Destination-Based Sales Tax Assistance
• Sales and Use Tax Definitions
• PIO-125, Determining Physical Presence and Where a Sale is Sourced Help Guide

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