• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
D&M Accounting Services

D&M Accounting Services

Serving Our Clients with the Utmost Honesty and Integrity

Serving Our Clients with the Utmost Honesty & Integrity
  • Accounting / Payroll
    • Business Accounting Services
    • Financial Statements
    • Payroll / Paycheck Processing
  • Tax Services
    • Tax Planning Services
    • Tax Return Preparation
    • Tax Refund Tracking
    • Tax and IRS Resources
  • Consulting
    • Small Business Consulting
    • Business Resources
  • Software Training
    • QuickBooks
    • Accounting Software Resources
  • Resources
    • Tax and IRS Resources
    • Business Resources
    • Accounting Software
  • Blog
  • About
    • Our Staff
    • About D&M Accounting
  • CARES ACT
  • Contact

Understanding State Tax Law For Businesses: Illinois

February 21, 2017 by dmaccount

As we all are aware, each state differs in the way they handle taxes for businesses. In this post we will focus on Illinois tax law, starting at a high level and working down to some key details which may spark some creative thinking for what you can do to decrease your business’s tax contribution. I would like to keep things as simple as possible here, so for further detail please visit tax.illinois.gov.

As of 2016, the business income tax rate is 5.25% for corporations, and 3.75% for trusts and estates. Here is a 2017 update for filing your 2016 taxes. Visit tax.illinois.gov to keep up with tax law updates.

Corporation’s original filing and payment due date is the 15th day of the 9th month following the close of your taxable year.

How to register a business in Illinois

For the quickest registration, visit mytax.illinois.gov and start your application and business profile. You may also mail in your IL-1040 form if you prefer.

Should your business charge sales tax in Illinois?

Not all things require payment of a sales tax in Illinois (a rate of 6.25% currently). Many types of services are an example of this – if you’re, say, a massage therapist or a pet groomer, you do not need to worry about sales tax. However, if your services include manufacturing or creating a product, you will need to charge a tax on products sold.

The majority of tangible items are taxable, besides a few select pieces of machinery, equipment, and building materials used for specific projects. Any place where you have “nexus” – a presence in a state that requires you to comply with sales tax laws, including inventory storage – also requires a sales permit.

Click here for more details on how to register for a sales tax permit in Illinois.

Business Incentives

There are many incentives the state of Illinois offers to businesses, including:

  • Business development, loans, and grants: access to capital with affordable rates and minority entrepreneur opportunities.
  • Financing: for farms, industries, businesses, local governments, hospitals, and other non-profits. This site has all the information you need to find access to the best funding.
  • Grants and procurement opportunities (federal): search through over 20,000 federal opportunities that may help you in your business efforts!
  • Grant Tracker: This site also has a search function to help you find the grant that you need, from coal grants (energy), technology grants, and tourism grants. Here’s another site specifically for local tourism grants.
  • Entrepreneurship and small business assistance: this site is dedicated to small businesses, from just starting out, to helping with licenses and permits.
  • Small business job creation tax credit: This site lists all the tax credits available for job creation, and other available programs.
  • Tax incentive and assistance programs: And even more programs and information for how to take advantage of these programs!
  • All the necessary registration, renewals, licenses, permits, and certifications are neatly listed here for convenience.

The SBA (small business administration) is always a great resource for small businesses as well.

Check out this great free resource which explains taxes in Illinois, as well as every US state – especially useful for those businesses selling in multiple states. https://www.salestaxhandbook.com/

Illinois Income Tax

For businesses, this is calculated by multiplying net income by a flat rate. This tax rate database will help you determine what your rate should be.

Property Tax

Owners of commercial, industrial, and agricultural property generally pay property tax directly. Read this guide to learn more.

Payroll

In Illinois, you must be registered to withhold income tax from your employees, and once you are a “withholding agent” you are then liable for those taxes. Read more here for the exact percentages. If you need help with payroll or paycheck processing, or would like an accountant to check over your books, feel free to contact D&M Accounting and we will be happy to help.

Illinois Internet Sales Tax

State sales tax on internet sales has been a topic of debate for some time now, and each state’s laws vary and are updated frequently, so be aware and use this guide to stay informed. In a lawsuit against the state of Illinois, the state sided with Amazon, which allows residents NOT to pay the 6.25% sales tax on products bought on Amazon, so if you sell your products on the web retail giant, no need to worry about your internet sales. If however you make sales from your own site, and you are physically present in the state where the sale took place (if you are located in Illinois and an Illinois resident buys from you), you are liable for those sales taxes.

 

If you have any questions regarding your business taxes or payroll, please contact us and we will be happy to help!

Filed Under: Blog, Taxes for Businesses

Primary Sidebar

262-253-9955

D&M Accounting Services, Inc.
N96 W18221 County Line Rd
Hwy Q (across from Fleet Farm)
Menomonee Falls, WI 53051

Watch Our Video!

Quick Links

  • Free Tax Organizer
  • How Can We Help You?
  • Schedule Appointment
  • Map & Directions

Accounting Assistance Financial Statement Assistance Payroll Processing Financial Consultant for Businesses Small Business Tax Specialists

Footer

D&M Accounting Services, Inc.

N96 W18221 County Line Rd
Menomonee Falls, WI 53051

Phone: 262-253-9955
Fax: 262-253-9953

  • Facebook
  • LinkedIn
DM Accounting Services, Inc. BBB Business Review

Tax Season Hours

January 1 – April 15
Mon – Fri: 8am – 6pm
Sat: 8am – 1pm
Sun: Closed

Regular Hours

April 16 – November 30
Mon – Thu: 8am – 4:30pm
Fri: 8am – 12:00pm noon
Sat – Sun: Closed

Winter Hours

December 1 – 3rd week of January
Mon – Fri: 8am – 5:00pm
Sat – Sun: Closed

Serving: Menomonee Falls, Germantown, Lannon and Milwaukee

Neighboring service areas include Ackerville, Adderley, Allenton, Butler, Cedar Creek, Colgate, Germantown, Hartford, Hubertus, Jackson, Kirchhayn, Lannon, Mayfield, Merton, Monches, Neosho, Richfield, Rubicon, Slinger, Sussex and West Bend

© 2021 D&M Accounting Services, Inc. (formerly D&M Bookkeeping). All Rights Reserved.