The term “sales tax” actually refers to several tax acts. Sales tax is a combination of “occupation” taxes that are imposed on sellers’ receipts and “use” taxes that are imposed on amounts paid by purchasers. Sellers owe the occupation tax to the department; they reimburse themselves for this liability by collecting use tax from the buyers. “Sales tax” is the combination of all state, local, mass transit, water commission, home rule occupation and use, non-home rule occupation and use, park district, county public safety and facilities, county school facility tax, and business district taxes.
“Sales tax” is imposed on a seller’s receipts from sales of tangible personal property for use or consumption. Tangible personal property does not include real estate, stocks, bonds, or other “paper” assets representing an interest.
If the seller (typically an out-of-state business, such as a catalog company or a retailer making sales on the internet) does not charge Illinois Sales Tax, the purchaser must pay the tax directly to the department. For purposes of this document, Illinois Sales Tax has three rate structures — one for qualifying food, drugs, and medical appliances; one for items required to be titled or registered; and another for all other general merchandise.
“Qualifying food, drugs, and medical appliances” include
* food that has not been prepared for immediate consumption, such as most food sold at grocery stores, excluding hot foods, alcoholic beverages, candy, and soft drinks;
* prescription medicines and nonprescription items claimed to have medicinal value, such as aspirin, cough medicine, and medicated hand lotion, excluding grooming and hygiene products; and
* prescription and nonprescription medical appliances that directly replace a malfunctioning part of the human body, such as corrective eyewear, contact lenses, prostheses, insulin syringes, and dentures.
“Vehicles” include motor vehicles, ATVs, watercraft, aircraft, trailers, and mobile homes. See the STS‑76, Illinois Aircraft/Watercraft and Vehicle Tax Information Guide, for complete definitions and tax applications.
“General merchandise” includes sales of most tangible personal property including sales of
* soft drinks and candy;
* prepared food such as food purchased at a restaurant;
* photo processing (getting pictures developed);
* prewritten and “canned” computer software;
* prepaid telephone calling cards and other prepaid telephone calling arrangements;
* repair parts and other items transferred or sold in conjunction with providing a service under certain circumstances based on the actual selling price;
* grooming and hygiene products;
* See Regulation 130.310 for a full listing.