Updated 8/2023: The Illinois sales tax holiday is not returning for 2023.
The Illinois Department of Revenue offers an education expense credit on tax returns for eligible purchases and individuals. Please see the Illinois Department of Revenue website for information.
The Illinois state sales tax holiday is a 10-day period during which consumers can purchase certain items and pay sales tax at a reduced rate. The effective dates are August 5th through August 14th, 2022. The state’s portion of sales tax due throughout the holiday is reduced by 5% from 6.25%. The consumers will pay 1.25% state sales tax plus the local sales tax rate during that period. To get the benefits of reduced sales tax, qualifying clothing and footwear should have a retail selling price of less than $125 per item and school supplies used by students in the course of study. School supplies are not subject to the $125 threshold.
- Some of the Qualifying items under state sales tax holiday rate
- Clothes
- bathing suits, caps, belts, coats, jackets, gloves, hats, etc.
- Footwear
- Shoes, Sandals, sneakers, socks and stockings, insoles, etc.
- School Supplies
- Binder, book bags, crayons, pencils, calculators
- Clothes
- Some of the Non-Qualifying items under state sales tax holiday rate
- Clothing Accessories
- jewelry, suitcases, hair products, etc.
- Computers and computer supplies
- Flash drive, data storage printers, etc.
- Instructional materials
- Reference books, maps, and globes
- Protective equipment and Art Supplies
- Breathing masks, ear and hearing protectors, clay, glazes, acrylics, etc.
- Clothing Accessories
Retailers should adjust their method of collecting sales tax beginning August 5, 2022, until the close of the business day on August 14, 2022. They will collect their sales tax at a reduced tax rate for qualifying items. During the State sales tax holiday periods, retailers must use the current sales tax in effect minus 5% holiday rate.
Example: Current normal sales tax rate (including local) 9.75%
Reduced rate (state portion) 5.00%
Sales tax during the holiday period 4.75%
Special sales such as coupons discount, bundled sales, rain checks, exchanges, returns, etc. will take further consideration and treatment. It will also depend on the terms and conditions of how the retailer will individually manage it. Please see the link for further information on how to address these special sales or contact your DHJJ advisor with any questions.
https://www2.illinois.gov/rev/research/publications/bulletins/Documents/2022/FY%202022-24_N0522.pdf
Schedule GT was specially created for retailers to report sales of qualifying items sold during the sales tax holiday. This schedule should be filed with your Form ST-1, Sales and Use Tax, and E911 Surcharge Return. However, retailers should continue to report their normal taxable sales including sales of the qualifying items.
