Two Illinois Sales Tax Rate Changes Taking Effect This Summer

Illinois businesses should review their sales tax collection procedures this summer as several state and local tax rate changes take effect in July and August 2026.

The Illinois Department of Revenue has issued guidance on two important updates: local sales tax rate changes effective July 1, 2026, and a Northern Illinois Transit Authority tax rate increase effective August 1, 2026. Retailers and servicepersons conducting taxable transactions in Illinois, especially those operating in Cook, DuPage, Kane, Lake, McHenry, and Will counties, should confirm that their point-of-sale systems, accounting software, and tax reporting processes are updated.

Local Sales Tax Rate Changes Effective July 1, 2026
Effective July 1, 2026, certain Illinois taxing jurisdictions have imposed or changed local sales tax rates on general merchandise sales. These changes may affect 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. View IDOR’s list of affected jurisdictions and updated local sales tax rates, you can also use the MyTax Illinois Tax Rate Finder.

According to the Illinois Department of Revenue, affected businesses must adjust their cash registers and computer systems so they collect and remit the correct sales tax beginning July 1, 2026. Businesses using sales tax or accounting software should confirm with their software provider that the correct rates have been updated.

The July 1 changes apply to general merchandise reported on Forms ST-1 and ST-2. The bulletin notes that locally imposed sales tax generally does not apply to sales of drugs and medical appliances or to items that must be titled or registered with an Illinois state agency.

NITA Tax Rate Increase Effective August 1, 2026
A separate change takes effect August 1, 2026, for businesses that sell taxable goods or services in Cook, DuPage, Kane, Lake, McHenry, and Will counties. The Northern Illinois Transit Authority, formerly the Regional Transportation Authority, occupation and use tax rate will increase by 0.25% in those counties.

This tax applies to several categories of sales, including general merchandise, qualifying groceries, qualifying drugs and medical appliances, items that must be titled or registered in Illinois, medical and adult-use cannabis, and aviation fuel. NITA rates are added to the applicable statewide rate, as well as any local taxes collected by the Illinois Department of Revenue. For complete details on this new sales and use tax rate read the Illinois Department of Revenue Bulletin.

For businesses making sales from a Cook County location, the new NITA occupation and use tax rate will be 1.25% for general merchandise and 1.50% for qualifying groceries, drugs, and medical appliances. For businesses making sales from DuPage, Kane, Lake, McHenry, or Will County locations, the new NITA rate will be 1.00% for general merchandise, qualifying groceries, and qualifying drugs and medical appliances.

The Illinois Department of Revenue also notes that businesses should update their cash registers or sales software to ensure the correct tax is collected beginning August 1, 2026. Businesses that use software to prepare tax forms should check with their vendor for updates.

Illinois businesses should take the following practical steps:

1. Confirm whether your locations are affected. Use the MyTax Illinois Tax Rate Finder and select the appropriate effective month, July 2026 or August 2026, to confirm your updated combined sales tax rate.

2. Update point-of-sale and accounting systems. Retailers, servicepersons, dealerships, cannabis dispensaries, aviation fuel sellers, and other affected businesses should make sure systems reflect the correct rates by the effective dates.

3. Coordinate with software providers. Businesses using third-party sales tax, accounting, e-commerce, or point-of-sale software should confirm that the vendor has implemented the new Illinois tax rates.

4. Review invoices, receivables, and reporting procedures. If a customer pays after a rate change for a sale that occurred earlier and was subject to a previous rate, special reporting may be required on Form ST-1. The IDOR guidance notes that certain lines are reserved only for reporting receipts subject to a previous rate.

5. Check multi-location reporting. Businesses filing Form ST-1 and Form ST-2 for multiple locations should review each registered location, since rates may vary by county, municipality, business district, and applicable local taxes.

Businesses with questions about how the new Illinois sales tax rates apply to their operations should consult their Weiss and Company LLP tax advisor or contact the Illinois Department of Revenue.