Illinois is offering a limited amnesty to settle historical retailers’ occupation tax (“ROT”) liabilities for eligible remote retailers that made sales to Illinois customers but did not have a physical presence in the state. Following the Supreme Court’s decision in South Dakota v. Wayfair, Inc., 585 U.S. 162 (2018), which allows states to impose sales tax collection and filing requirements on out-of-state retailers based on economic nexus, even if they have no physical presence in the state. Illinois subsequently adopted such economic nexus provisions, which required remote sellers who exceeded sales or revenue thresholds to collect and remit ROT from sales delivered to customers in Illinois. Under the Illinois Remote Retailer Amnesty Program, eligible taxpayers who exceeded the applicable thresholds can resolve certain historical Illinois state and local retailers’ occupation tax liabilities without having to pay penalties or interest for periods covering January 1, 2021, through June 30, 2026. The application window for the program runs from August 1, 2026, through October 31, 2026.
To participate, a taxpayer must be registered with the Illinois Department of Revenue and have access to a MyTax Illinois account before submitting its application.
Key Benefits
The primary benefit of pursuing the amnesty program is to have penalties and interest waived on eligible historical Illinois state and local retailers’ occupation tax liabilities that cover the period January 1, 2021, through June 30, 2026. The program also simplifies the calculation of tax due by allowing taxpayers to use simplified rates rather than determining the applicable local, destination-based tax rates for each prior sale. Based on the current Illinois Department of Revenue guidance, the simplified rates are 9% of the gross receipts from sales of tangible personal property that are subject to the 6.25% state rate, and 1.75% of the gross receipts from sales of tangible personal property that is subject to the 1% state rate and food for human consumption that is to be consumed off the premises where it is sold using the simplified rates rather than a specific jurisdiction’s local rates.
What Companies Should Do Now
Companies that may have historical Illinois state and local retailers’ occupation tax liabilities should begin preparing now by quantifying potential liability, gathering historical sales data, confirming registration status, and evaluating whether participation in the program is beneficial. To obtain relief, the Remote Retailer Amnesty Application must be filed electronically through MyTax Illinois between August 1, 2026, and October 31, 2026, and the taxpayer must either remit payment in full or request and obtain approval for a payment plan.
How Forvis Mazars Can Help
Forvis Mazars can assist companies in evaluating whether they qualify for the program and whether participation is the most effective way to address prior Illinois ROT exposures, as well as the costs and benefits of their options. Our team can help estimate potential liability based on historical sales activity using the program’s simplified methodology and identify any related registration or filing considerations.