July 1 is five weeks away.
And if you sell into Illinois — whether from a storefront, a warehouse, or an ecommerce platform — your sales tax rates may be about to change.
Effective July 1, 2026, certain Illinois taxing jurisdictions have imposed a new local sales tax or changed their local sales tax rate on general merchandise sales.
The Illinois Department of Revenue is direct about what businesses need to do: update your cash register and any computer program so that beginning on July 1, 2026, you will collect and pay the correct sales tax. Contact your software vendor if you use software to create your forms. Savant Labs
That's not a suggestion. It's a compliance requirement. And the window to act is now.
Illinois has a layered sales tax structure. The state base rate of 6.25% stays the same on July 1. What's changing is the local layer — the rates imposed by individual cities, counties, business districts, and transit authorities on top of the state base.
The affected local tax types include business district sales tax, county public safety tax, home rule municipal sales tax, Metro-East Mass Transit District sales tax, and non-home rule municipal sales tax. Galvix
That covers a wide range of local jurisdictions — meaning the July 1 changes aren't confined to one part of the state. They're spread across Illinois, affecting sellers in multiple regions simultaneously.
Two counties and 48 other municipal governments in Illinois have already increased rates since January 1, 2026 — with McLean County seeing the largest population-area increase at 1 percentage point. July 1 brings another wave. Numeral
The Illinois Department of Revenue's official bulletin identifies the specific jurisdictions with rate changes effective July 1. Here's a sample of what's changing:
Home rule or non-home rule sales tax rates are changed in the following jurisdictions: Addison, Anna, Arlington, Bartlett, Blue Island, Bull Valley, Charleston, Colfax, Colona, Cornell, Danvers, Deer Creek, De Pue, Dover, Farmer City, Glen Carbon, Hamel, Harrisburg, Highwood, Hudson, Kenilworth, Knoxville, Ladd, Le Roy, Morton, Mount Carmel, New Athens, Newman, Richmond, Sherman, Sleepy Hollow, South Elgin, Spring Grove, Spring Valley, St. Anne, Tonica, Troy, Westmont, Williamsfield, Wonder Lake, Woodson, and Wyanet.
Sales tax rates in McLean and Whiteside counties are also changing. New business districts starting to charge sales tax include: Bartonville Business Development District No. 1, Janson Ford Business District in Breese, Downtown and Dundee Crossing Business District in East Dundee, Montrose Business District, and Parkway I-280 Business District in Rock Island.
Notable specific changes from the IDOR bulletin include:
To verify your new combined sales tax rate — state and local — go to the MyTax Illinois Tax Rate Finder at mytax.illinois.gov and select rates for July 2026. That's the authoritative source for your specific address or delivery location. Savant Labs
The rate change bulletin sounds straightforward: check the list, update your rates, done.
In practice, it's more complicated — especially for ecommerce sellers and marketplace facilitators.
Sales made by remote retailers who meet the $100,000 tax remittance threshold are subject to business district sales taxes if the property is shipped or delivered to an address in the business district. Sales made over a marketplace by marketplace facilitators who meet the $100,000 threshold are subject to business district sales tax on sales shipped or delivered to an address in the business district. Avalara
That means if you sell online and ship to customers in Illinois — and you've crossed the $100,000 economic nexus threshold — you're responsible for collecting the correct business district rate for every delivery address. Not just the city or county rate. The specific business district rate, if the delivery address falls inside one.
Illinois has hundreds of business districts. Rates vary not just by city but by block. A business district that spans four blocks in one direction but not the other can mean two different tax rates on two orders delivered to addresses a few hundred feet apart.
The Illinois sales and use tax rates range from 6.25% to 11.0%, depending on the location — a spread of nearly 5 percentage points driven entirely by local variation. July 1 widens that variation further.
There's a separate but related July 1 issue for businesses that sell food in Illinois.
The Illinois Department of Revenue will issue a separate bulletin specifically regarding municipal and county rates for Municipal and County Grocery Occupation Taxes that take effect July 1, 2026. Savant Labs
This is the downstream consequence of Illinois eliminating its state grocery tax on January 1, 2026 — a move we covered earlier this year. When the state removed its 1% grocery tax, it simultaneously gave municipalities the option to impose their own 1% local grocery tax. Roughly 600 of Illinois' 1,300+ communities opted in — with many taking effect January 1 and others scheduled for July 1.
If you sell qualifying grocery items in Illinois, you're dealing with two separate rate change events: the general merchandise rate changes covered in the main bulletin, and the grocery-specific changes covered in the forthcoming separate bulletin. Both take effect July 1. Both require system updates. Both require different handling of different product categories.
This is exactly the kind of compliance complexity that causes businesses to under-collect or over-collect — often without realizing it until an audit surfaces the discrepancy years later.
The Illinois Department of Revenue is unusually explicit about business obligations in this bulletin. Here's what they require:
1. Update your point-of-sale systems. Every cash register, point-of-sale terminal, and tax calculation tool must reflect the new rates before the first transaction on July 1. Collecting the old rate after a rate change takes effect means under-collecting from customers and under-remitting to the state — a liability that sits with the business, not the customer.
2. Contact your software vendor. IDOR specifically instructs businesses to contact their software vendor if they use software to create their forms. Rate changes don't update automatically in all systems — especially custom-built or legacy point-of-sale platforms. Assume your system needs manual verification unless you know for certain it auto-updates. S
3. Verify every affected delivery address. For ecommerce sellers, "update your rates" is more complex than it sounds. You need to verify whether your customer delivery addresses fall inside any of the affected jurisdictions — including business districts with their own separate rates that may not be obvious from city or ZIP code alone.
4. Report correctly on your returns. If a sale was subject to a sales tax rate different from the current rate, report that sale on Line 8a of Forms ST-1 and ST-2. Note: Line 8a is used only to report sales subject to a different sales tax rate — no other use is permitted. Savant Labs
5. Watch for the grocery bulletin. The separate IDOR bulletin covering grocery occupation tax changes is forthcoming. If you sell food in Illinois, don't assume the general merchandise bulletin covers your full compliance obligation — it doesn't.
The July 1 changes aren't happening in isolation. Illinois has already been through a significant compliance event this year.
On January 1, 2026, Illinois eliminated its 200-transaction economic nexus threshold — meaning out-of-state sellers now trigger nexus based solely on the $100,000 revenue threshold, with no transaction count safe harbor. That same day, the state grocery tax was eliminated at the state level. Dozens of local jurisdictions changed their rates on January 1 as well.
July 1 is the second wave. Illinois updates its local tax rates twice a year — January 1 and July 1 — which means businesses selling in the state face a biannual compliance review cycle just to stay current.
Tax rates in Illinois are generally updated on January 1 and July 1 each year — a pattern that requires businesses to build a standing process for verifying Illinois rates at each update cycle, not just reacting when a notice arrives. Mass.gov
Five weeks sounds like enough time. For businesses with complex systems, multiple locations, or large ecommerce catalogs — it may not be.
The practical timeline works backward from July 1:
Miss any step and you're either over-collecting from customers — a customer service problem — or under-collecting from them — a tax liability that accrues with interest and penalties.
Selling in Illinois and not sure whether your addresses are affected by the July 1 rate changes — or whether your systems are set up to handle Illinois's address-level rate complexity? Book a free consultation with our team at sales.tax. We'll review your Illinois footprint, identify affected jurisdictions, and make sure your compliance is locked in before July 1.