Key Takeaways

• Sales tax rates are increasing on August 1, 2026, for taxable sales in Cook, DuPage, Kane, Lake, McHenry, and Will counties due to a 0.25% increase in the Northern Illinois Transit Authority (NITA) Occupation and Use Tax.
• Businesses should update their sales tax systems before August 1 to ensure they are collecting the correct tax rate on taxable transactions in the affected counties.
• Vehicle dealers and other businesses selling titled or registered property should review the updated NITA tax rates that apply to these transactions and confirm they are reporting sales correctly.

Businesses making taxable sales in parts of Northern Illinois should prepare for an upcoming sales tax change.

While many businesses are familiar with the local sales tax rate changes that typically take effect on January 1 and July 1 each year, this increase is different. The August 1, 2026 change is the result of new legislation affecting the Northern Illinois Transit Authority (NITA) and applies specifically to Cook, DuPage, Kane, Lake, McHenry, and Will counties. Businesses that collect Illinois sales tax in these counties should review their tax rates before the new rates take effect.

Whether you operate a storefront, sell online, or deliver products into these counties, reviewing your sales tax setup now can help you avoid collecting the wrong amount of tax and reduce potential compliance issues.

Why is the sales tax changing?

The tax increase is the result of legislation that established the Northern Illinois Transit Authority (NITA), which now oversees the regional transit taxes previously administered by the Regional Transportation Authority (RTA).

Unlike the routine local sales tax rate changes that typically take effect on January 1 and July 1 and often affect individual municipalities or business districts, the August 1 increase is different. It is a regional change driven by new legislation that applies across six counties. Businesses that updated their systems for the July 1 local rate changes should still verify that the August 1 NITA increase has also been applied where applicable.

Beginning August 1, 2026, the NITA Occupation and Use Tax rate will increase by 0.25% in the six-county region. For most businesses, this means the total sales tax collected on taxable sales will increase accordingly.

It’s important to note that the Illinois state sales tax rate is not changing. This increase affects only the local NITA portion of the overall sales tax rate.

Which counties are affected?

The increase applies to taxable sales made in the following counties:

• Cook County
• DuPage County
• Kane County
• Lake County
• McHenry County
• Will County

If your business has a physical location in one of these counties, delivers taxable goods into these areas, or has Illinois sales tax collection responsibilities there, you should determine whether the updated rates apply to your transactions.

What types of sales are affected?

The new NITA tax rates generally apply to retail sales of taxable tangible personal property that are already subject to Illinois sales tax.

The increase affects the local transit tax portion of the total tax collected from customers. Businesses should ensure they are collecting the correct combined sales tax rate based on where the sale is sourced under Illinois sales tax rules.

Vehicle sales and titled property

The legislation also changes the NITA tax rates on items that must be titled or registered with the State of Illinois, such as motor vehicles, watercraft, aircraft, trailers, and certain mobile homes.

Beginning August 1, 2026:

• Cook County: The NITA tax rate on titled or registered items increases to 1.25%.
• DuPage, Kane, Lake, McHenry, and Will counties: The NITA tax rate on titled or registered items increases to 1.00%.

Businesses that sell these items should review the Illinois Department of Revenue’s updated guidance to ensure the correct rates are being applied.

What businesses should do before August 1

To prepare for the new rates, businesses should consider taking the following steps:

• Review whether your business makes taxable sales in any of the six affected counties.
• Update point-of-sale systems, cash registers, accounting software, ERP systems, and e-commerce platforms with the new tax rates.
• Confirm that any automated sales tax software has been updated by your provider.
• Review recurring invoices, contracts, and customer billing for transactions that may span the August 1 effective date.
• Verify that employees responsible for invoicing, billing, or tax compliance are aware of the changes.

Taking these steps before the effective date can help prevent under-collecting or over-collecting sales tax and reduce the need for future corrections.

Filing and reporting considerations

The Illinois Department of Revenue has also updated reporting instructions for retailers filing sales tax returns after the rate change.

Businesses filing electronically through MyTax Illinois will generally have the updated rates reflected automatically based on their registered locations. Businesses using paper returns should ensure they are using the appropriate forms and reporting instructions for periods that include the August 1 effective date.

If your business has sales that occur before August 1 but payment is received afterward, or you have questions about how to report transactions that cross the effective date, additional guidance is available from the Illinois Department of Revenue.

Need Assistance?

Sales tax changes often seem minor, but even a quarter-percent increase can create compliance issues if systems aren’t updated on time. If your business operates in Cook, DuPage, Kane, Lake, McHenry, or Will County and you’re unsure how these changes affect your sales tax obligations, DHJJ’s State and Local Tax (SALT) professionals can help you understand the new requirements, update your compliance processes, and answer questions about the August 1 implementation.

Frequently Asked Questions

When does the sales tax increase take effect?

The new NITA Occupation and Use Tax rates take effect August 1, 2026. Businesses should begin collecting the updated tax rates on taxable sales made on or after that date.

Which Illinois counties are affected?

The increase applies to taxable sales made in Cook, DuPage, Kane, Lake, McHenry, and Will counties. Businesses with retail locations or customers in these counties should verify that the correct rates are being collected.

Is the Illinois state sales tax rate changing?

No. The Illinois state sales tax rate is not changing. The increase applies only to the Northern Illinois Transit Authority (NITA) Occupation and Use Tax, which is one component of the total sales tax collected in the affected counties.

What should businesses do before August 1?

Businesses should review where they make taxable sales, update point-of-sale systems, accounting software, ERP systems, and e-commerce platforms with the new rates, and confirm any automated sales tax software reflects the August 1 changes.