Illinois Provides Guidance on Remote Retailer Amnesty Program

The Illinois Department of Revenue (“Department”) recently issued guidance regarding the state’s remote retailer tax amnesty program, which runs for a three-month period starting August 1, 2026, and offers participants the use of simplified rates as well as a waiver of interest and penalties.¹ The program was authorized by legislation enacted in 2025.²

The amnesty period runs from August 1 through October 31, 2026. According to the guidance, the amnesty applies to sellers that have no in-state physical presence with unpaid tax liabilities on sales of tangible personal property to Illinois customers made between January 1, 2001, and June 30, 2026. Participants must meet the required tax remittance thresholds for any calendar quarter ending in 2021 through 2025, which consist of at least $100,000 in annual gross receipts during the four preceding calendar quarters or at least 200 separate transactions during the four preceding calendar quarters. For any calendar quarter starting on or after January 1, 2026, only the $100,000 gross receipts threshold applies.

In addition to receiving an interest and penalty waiver on payments made during the amnesty period, the program allows remote sellers to pay their unpaid liabilities at 1) a simplified 9% rate (a combination of the 6.25% state rate and 2.75%, which represents a uniform local rate) and 2) a 1.75% rate for sales of items normally subject to the state 1% rate (e.g., food for off-site consumption, medicines, drugs, medical appliances).

Eligible remote sellers who do not participate in the amnesty program may be subject to audit and will be assessed tax at a 15% rate if insufficient information is available to document the proper location for destination-based sales.

In addition, the guidance noted that sellers may apply any existing overpayment or credit memorandum to amnesty payments, may participate in the program even if they are already subject to an audit, and are eligible for payment plans if they are unable to make payment in full. Amnesty liabilities must be paid through the MyTax Illinois system, in which amnesty participants must have registered accounts with the Department. Various unpaid penalties and fees are not eligible to be paid as part of the program.

Ryan’s Take and Action Steps

In addition to the penalty and interest waiver, with local rates as high as 5%, the simplified 9% rate may benefit remote sellers that struggle to determine the correct destination-based tax rates. The potential 15% tax on non-participants should incentivize remote sellers to participate. As noted by the Department, participation requires taxpayers to enroll and submit payments through the MyTax Illinois system.

Ryan’s team can guide remote sellers through this process now, so when amnesty begins later this summer, those impacted can submit payments and avoid unnecessary interest and penalties, as well as higher local tax rates than the simplified rate being offered. The 2026 amnesty program offers some pros and cons compared to that which was offered in 2025.

¹ Informational Bulletin: 2026 Illinois Remote Retailer Tax Amnesty Program (June 2026).

² HB 2755 (Public Act 104-0006), enacted June 16, 2025.

The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals.