Illinois Sales Tax Holidays: What You Need to Know

The state of Illinois has announced a state sales tax holiday on a range of back-to-school items from August 5-14, 2022, directly affecting Illinois retailers.

The move comes on top of a previously announced yearlong suspension of the state’s 1% tax on retail sales of groceries, from July 1, 2022, through June 30, 2023.

The back-to-school tax holiday reduces collected and reported sales taxes during this period on certain clothing items and school supplies by 5%. There are cost restrictions for the clothing items, and specific guidelines for qualifying school supplies. Retailers will not only have to adjust collected taxes during this period, but follow specific rules for returns, exchanges, rainchecks and bundled items. There are additional guidelines for returns and exchanges for items that were purchased before, but returned during, the tax holiday.

The grocery tax holiday covers retail purchases of food for human consumption that is to be consumed off the premises where it is sold, e.g. grocery stores. It does not include alcoholic beverages, food consisting of or infused with adult use cannabis, soft drinks, candy, and food that has been prepared for immediate consumption.

For more details on the back-to-school tax holiday, read this bulletin from the Illinois Department of Revenue. Details of the grocery tax holiday measure are available here. And as always, feel free to reach out to your Weiss & Company LLP representative directly.