Selling into Illinois: destination tax, Chicago freight and a cart discount plan
Illinois is a destination-tax state for online sellers: the Department of Revenue says tax on a remote retailer's sale is calculated at the rate in effect where the goods are delivered, and that rate changes from one address to the next. Since Jan. 1, 2026 a remote retailer's registration trigger is a single test, 100,000 dollars in receipts from Illinois buyers, because the 200-transaction test was removed. Illinois is also where the parcel and container networks of the Midwest meet in Chicago. This page sets out what the Department's bulletins say, what the Chicago rail and air figures are, and how to word a cart discount when two shoppers with the same cart owe different tax.
Shipping into the state
Parcels bound for Illinois shoppers are taxed at the rate of the address that receives them, so the same 100 dollar cart can carry different tax in Chicago, in a county seat and in a rural township, and the Department points sellers to its Tax Rate Finder for each address. For inbound and outbound freight the state sits on the Chicago hub: the CREATE Program says nearly half of the nation's intermodal trains pass through the region, and O'Hare reports more than two million metric tonnes of cargo.
Source: CREATE Program (Chicago Region Environmental and Transportation Efficiency Program)
A cart discount plan for a destination-tax state
- Before you set the tiers
Write each tier against the product subtotal, not the total with tax, and say so in the banner. Because the destination decides the tax, the same cart totals differently from one address to the next, and a tier tied to the grand total would be reached by some shoppers and missed by others with identical carts.
- If you have an Illinois presence or ship from out of state
Check which side of the Department's rules you are on. Retailers with a physical presence whose sales are sourced outside Illinois have been on destination-based tax since Jan. 1, 2025, and each city or county you sell into is a registered tax site, so build the tiers once and let the tax follow the address.
- When you review your Illinois sales each quarter
Add up gross receipts from Illinois buyers. Since Jan. 1, 2026 a remote retailer is measured only against 100,000 dollars in cumulative receipts, so a store with many small orders is no longer caught by a transaction count, and a store with a few large ones is caught by the dollar line alone.
- When you price tiers on grocery items
Do not promise a tax-free price on food. The state's 1 percent grocery tax ended on Jan. 1, 2026 but a municipality or county may charge its own 1 percent, so the shelf price and the tax can differ by address even for the same item.
Source: Illinois Department of Revenue: Compliance Alert CA-2026-01, Local Grocery Tax
- Before you test the tiers
Run test orders to a Chicago address, a downstate address and an address outside any municipality, and check that the discount line, the tax line and the tier banner agree. A margin floor for each tier is in the discount floor post linked below.
Build it with the Cart discount tiers template.
Requires: Growth plan or higher.
Questions merchants ask
- Does Illinois tax online sales at the buyer's address?
- Yes for the cases the Department describes. For remote retailers and marketplace facilitators the tax is destination-based, meaning it follows the location where the goods are shipped or delivered or where the buyer takes possession. The Department points retailers to the MyTax Illinois Tax Rate Finder for the rate of an address. This is not tax advice; confirm with the Illinois Department of Revenue.
- What is the remote seller threshold in Illinois now?
- According to Bulletin FY 2026-12, from Jan. 1, 2026 the 200-transaction test no longer applies and the test is 100,000 dollars or more in cumulative gross receipts from sales of tangible personal property to Illinois purchasers. Confirm your own position with the Department; this is not tax advice.
- What happens if a seller cannot show where a sale was made?
- The Department's bulletin says that starting Jan. 1, 2026 it will tax the gross receipts of sales whose location it cannot determine at 15 percent. Record the delivery address of every Illinois sale so the rate follows the destination instead.
- Did Illinois end its grocery tax?
- The state's 1 percent tax on grocery sales ended on Jan. 1, 2026, according to the Department's compliance alert. The same alert says municipalities and counties may impose a local grocery tax of exactly 1 percent, so the tax on food can still depend on where it is delivered.
- Why does Chicago matter for a Shopify store's shipping?
- The CREATE Program says nearly half of the nation's intermodal trains pass through the Chicago region, and the airport authority says O'Hare processes over two million metric tonnes of cargo. If your inventory moves through the Midwest by rail or air, plan stock and delivery promises around that network.
Related reading
Facts and sources
The Department of Revenue's guidance says that for sales on and after Jan. 1, 2025, retailers with any kind of physical presence in Illinois whose sales are sourced outside the state, who were previously obligated to collect Illinois Use Tax, are subject to the destination-based Retailers' Occupation Tax, the total State and local rate calculated for the sale.
Illinois Department of Revenue: Bulletin FY 2025-10, Retailers' Occupation Tax Guidance for Out-of-State Retailers and Certain Illinois Retailers (accessed October 10, 2026)
Affected retailers register a tax site for each jurisdiction, meaning each city or county, where they have made or plan to make destination-based sales, and the sales are reported on Form ST-2.
Illinois Department of Revenue: Bulletin FY 2025-10, Retailers' Occupation Tax Guidance for Out-of-State Retailers and Certain Illinois Retailers (accessed October 10, 2026)
Effective Jan. 1, 2026, the 200-transaction threshold for requiring remote retailers and marketplace facilitators to collect and pay destination-based sales tax is removed, so only the test of 100,000 dollars or more in cumulative gross receipts from sales of tangible personal property to Illinois purchasers remains; before 2026, either 100,000 dollars or 200 separate transactions in the 12-month lookback triggered the tax.
Illinois Department of Revenue: Bulletin FY 2026-12, Destination-Based Retailers' Occupation Tax Changes (accessed October 10, 2026)
The Department defines the destination of a sale as the location to which the property is shipped or delivered or at which possession is taken by the purchaser.
Illinois Department of Revenue: Bulletin FY 2026-12, Destination-Based Retailers' Occupation Tax Changes (accessed October 10, 2026)
Starting Jan. 1, 2026, if a taxpayer does not provide enough information to determine where a sale was made, the Department will tax the gross receipts of those sales at 15 percent.
Illinois Department of Revenue: Bulletin FY 2026-12, Destination-Based Retailers' Occupation Tax Changes (accessed October 10, 2026)
The bulletin says a taxpayer below the 100,000 dollar threshold who still collects destination-based tax after Jan. 1, 2026 must refund it or report it as Use Tax, and that anything above the 6.25 percent State Use Tax rate is reported as excess tax.
Illinois Department of Revenue: Bulletin FY 2026-12, Destination-Based Retailers' Occupation Tax Changes (accessed October 10, 2026)
The Department's guidance sends retailers to the Search by Address function of the Tax Rate Finder in MyTax Illinois to look up destination-based sales tax rates for individual locations.
Illinois Department of Revenue: Bulletin FY 2025-10, Retailers' Occupation Tax Guidance for Out-of-State Retailers and Certain Illinois Retailers (accessed October 10, 2026)
Effective Jan. 1, 2026, the State of Illinois eliminated the 1 percent sales tax on grocery sales.
Illinois Department of Revenue: Compliance Alert CA-2026-01, Local Grocery Tax (accessed October 10, 2026)
Municipalities and counties may impose a local grocery tax of exactly 1 percent by ordinance, so the tax on a grocery item sold into Illinois depends on the delivery address.
Illinois Department of Revenue: Compliance Alert CA-2026-01, Local Grocery Tax (accessed October 10, 2026)
The CREATE Program states that each year nearly half of the nation's intermodal trains pass through the Chicago region.
CREATE Program (Chicago Region Environmental and Transportation Efficiency Program) (accessed October 10, 2026)
At Belt Junction, which the CREATE Program describes as the most congested chokepoint in the Chicago terminal, 30 Metra and 90 freight trains per day cross each other's paths.
CREATE Program (Chicago Region Environmental and Transportation Efficiency Program) (accessed October 10, 2026)
The Chicago Department of Aviation says O'Hare processes over two million metric tonnes of cargo worth over 200 billion dollars and ranks in the top 20 globally and first by freight value of all airports in the Americas; the page does not name a year.
Chicago Department of Aviation (FlyChicago): Cargo (accessed October 10, 2026)
Illinois has 55,519 square miles of land area and 57,914 square miles in total.
U.S. Census Bureau: State Area Measurements (2010) (accessed October 10, 2026)
Cities in Illinois
- ChicagoChicago's 10.25 percent sales tax example, the 2026 transit tax change, O'Hare cargo and the October marathon, with a landing page free shipping plan.
Not tax advice. Confirm current rules with the state revenue department before you rely on a date or an exemption.
Run the Illinois plan in Freebies Engine by Log Studio Lab.
Requires: Growth plan or higher.