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Illinois Sales Tax Audit Defense & Compliance
Whether you're facing a Illinois sales tax audit, fighting an assessment, or trying to get compliant before the state finds you — our team handles your case end to end. Former Illinois state auditors, sales tax attorneys, and CPAs on staff.
Illinois Sales Tax — Frequently Asked Questions
How does an Illinois IDOR sales tax audit work?
The Illinois Department of Revenue (IDOR) initiates audits with a written notice of audit selection. IDOR auditors review your Illinois ST-1 returns, sales records, and exemption certificates. Audits typically cover three years. If errors are found, IDOR issues a Notice of Tax Liability. You have 60 days to protest.
What triggers an Illinois sales tax audit?
Common IDOR audit triggers include industry targeting (restaurants, construction, auto dealers), large exemption claims without proper documentation, discrepancies between federal income tax returns and sales tax filings, and use tax compliance failures on out-of-state purchases.
What is the Illinois sales tax rate?
Illinois state sales tax is 6.25% on general merchandise. Chicago's combined rate reaches 10.25%. Rates vary significantly by municipality — Cook County, DuPage, and the collar counties all have different local rates. Groceries and drugs are taxed at a reduced 1% state rate.
Can I appeal an Illinois sales tax assessment?
Yes. After receiving a Notice of Tax Liability, you have 60 days to file a protest with IDOR. IDOR will schedule an informal conference. If unresolved, you can request an administrative hearing before the Independent Tax Tribunal (ITT). Further appeals go to the Illinois Appellate Court.
Does Illinois have economic nexus for sales tax?
Yes. Illinois requires out-of-state sellers to collect sales tax if they exceed $100,000 in Illinois sales in the prior 12-month period. The transaction threshold was eliminated. Remote sellers must register and collect once the revenue threshold is met.
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