Illinois resale certificates and retail sales tax for small stores

How to get an Illinois resale certificate and what it must contain

IDOR frames it simply: Illinois businesses may purchase items tax free to resell, and sales tax is collected when the items are sold at retail. To document tax-exempt purchases, retailers must keep a certificate of resale in their books and records. Purchasers may use Form CRT-61 or make their own, and a copy goes to the seller.

A home-made certificate is allowed but must carry specific content: the seller name and address, the purchaser name and address, a description of the property, a statement that it is being purchased for resale, the purchaser signature and date, and either the purchaser Illinois retailer or reseller account ID number or a Certificate of Resale to an out-of-State purchaser. A signed purchase order containing all of that can serve as the certificate.

Two housekeeping points matter more than they look. IDOR states it is the seller responsibility to verify that the purchaser account ID is valid and active, which can be confirmed with Verify a Registered Business at MyTax Illinois; and the seller must keep the certificate for not less than three and one half years.

Blanket certificates, percentage certificates and the three-year clock

If everything you buy from a supplier is for resale, you do not need a certificate per invoice. IDOR states that a purchaser may provide a blanket Certificate of Resale to any seller from whom all purchases are sales for resale, and that a blanket certificate may instead specify a percentage, useful where a store buys cleaning supplies it both sells and uses.

The maintenance rule lapses quietly. IDOR states that blanket and percentage blanket certificates must be updated at least once every three years, and that a new certificate should be provided if a specified percentage changes. A store that filed once at opening and never touched it again holds a stale document.

Give every supplier a fresh blanket certificate on a rolling three-year cycle and keep your own copy. The certificate is the seller documentation of the exemption, and IDOR puts the verification and retention duties on the seller, so a stale certificate is first your supplier problem, and reaches you through the commercial relationship rather than automatically as a tax bill.

The high rate and the grocery rate: what falls on each side

Illinois runs two retail rates for food and medicine, and the lower one changed on January 1, 2026. IDOR describes the high rate as the state tax of 6.25 percent plus local taxes, applying to all non-food general merchandise and also to alcoholic beverages, cannabis-infused food, soft drinks, candy, and food prepared for immediate consumption. The one percent low rate historically covered qualifying food, drugs and medical appliances together.

Those two halves have now split, and it is the most misunderstood point on the Illinois shelf this year. Groceries are no longer taxed at a state rate at all: the state one percent on groceries was eliminated, and a grocery item is taxed only where a municipality or county adopted the one percent local grocery tax, or where the location sits in the RTA or MED areas whose grocery tax survived. Medicines did not move, IDOR states that items qualifying as prescription or non-prescription medicines and drugs are not groceries and continue to be taxed at the State low rate of one percent. So pain relief and a loaf of bread can now carry different tax in the same basket, and what the bread carries depends on your address.

The definition of candy is narrower than shelf intuition suggests, and it is worth knowing exactly. IDOR defines candy as a preparation of sugar, honey, or other natural or artificial sweeteners in combination with chocolate, fruits, nuts or other ingredients or flavorings in the form of bars, drops, or pieces, and states that candy does not include any preparation that contains flour or requires refrigeration. Read that second exclusion precisely: the test is whether the product requires refrigeration, not whether you happen to sell it cold. IDOR spells the difference out, items that otherwise meet the definition and do not require refrigeration are candy even if they are sold refrigerated or frozen, and the example it gives of a high-rate item is a frozen candy bar without flour as an ingredient. That is also why a chocolate-covered pretzel and a flour-containing cookie fall outside candy.

Seating changes the answer for everything. IDOR states that where retailers provide seating or facilities for on-premises consumption, all food sales are presumed taxable at the high rate as food prepared for immediate consumption. The presumption can be rebutted only if the on-premises area is physically separated or otherwise distinguishable and the retailer accounts for the two streams of receipts separately.

• Groceries at the low or local grocery rate: packaged foods for consumption off the premises, prepackaged snacks, chips, bread products, cookies, fruits, vegetables, meats, milk, canned goods and yogurt that the retailer did not prepare, infant formula, and bagged ice, which IDOR states qualifies as groceries no matter where it is sold.
• Drinks at the low or local grocery rate: carbonated and non-carbonated water without natural or artificial sweeteners, flavored water with no sweeteners, vegetable or fruit juices containing greater than 50 percent juice, any drinks containing milk or milk substitutes such as soy or rice, beverage powders and dry mixes, concentrates, and ground or whole bean coffee and loose leaf tea or tea bags.
• High rate regardless: alcoholic beverages, cannabis-infused food, soft drinks, candy as defined above, and food prepared for immediate consumption. IDOR states some foods, such as hot foods, are always considered food prepared for immediate consumption.
• Not groceries but still low rate: items meeting the definition of food that qualify as prescription or non-prescription medicines or drugs continue to be taxed at the state low rate of one percent. IDOR states the test is a medicinal claim on the label, and gives freshens breath, prevents, protects and supports as examples of claims that do not on their own make a product a medicine.

The January 1, 2026 grocery tax change, and what your store has to check

IDOR states that effective January 1, 2026 Illinois eliminated the one percent state sales and use tax on retail sales of groceries, and that the change authorizes municipalities and counties to impose a local grocery tax of exactly one percent by ordinance, under Public Act 103-0781. The existing local tax on grocery food within the Regional Transportation Authority or Metro-East Mass Transit District areas was not eliminated.

The duty this places on the retailer is explicit. IDOR states that retailers are responsible for verifying whether their municipality or county imposed a local grocery tax, and that where it did, the rate on groceries is unchanged and only the return line moves. Verify your combined rate with the MyTax Illinois Tax Rate Finder.

The filing side also moved. Where a grocery tax is imposed, grocery receipts go on Line 5c of Form ST-1, and on Form ST-2 where applicable. Where none is imposed and the location sits outside the RTA and MED areas, retailers report gross grocery receipts but itemize and deduct them on Schedule A, Line 16.

The Chicago and Cook County taxes that land at your checkout

Chicago stores collect two small taxes that surprise anyone moving in from the suburbs. The Checkout Bag Tax applies to the retail sale or use of checkout bags in the city, and the city states the rate as $0.15 per bag as of January 1, 2026, up from $0.10 as of January 1, 2025 and $0.07 before that. It does not apply to bags carrying items purchased under SNAP or a similar governmental food assistance program, and since January 1, 2025 a store is allowed a credit of one cent per bag when remitting to a wholesaler.

The Bottled Water Tax applies to retail sales of bottled water in the city at $0.05 per bottle. The city states that wholesalers are required to collect it and that retailers must collect if the wholesaler does not, so read your water invoices before assuming it is handled. For water bought with SNAP or LINK the city guide sets out two steps, and both matter. First, do not charge the tax at the register: if you state the tax separately, program the register not to charge it on those transactions, and if you show one tax-inclusive price, program it to reduce the total by $0.05 per bottle, with a manual override if neither is possible, so the customer is not charged. Second, take a credit for those exempt purchases on the next bills from your wholesalers. The city requires both retailer and wholesaler to keep records of the transactions.

Cook County generates the most stale advice of all. The Cook County Sweetened Beverage Tax is not in effect and has not been since 2017: the county Department of Revenue told distributors and retailers in November 2017 that the Board had repealed the ordinance, that the repeal would be effective December 1, 2017, and that the last returns were due December 20, 2017. Any point-of-sale template still showing a Cook County penny-per-ounce line is describing a tax that ended nearly a decade ago.