Last updated September 29, 2020
Tax Registration & Requirements
Quick Start Guide
This Quick Start Guide is a brief overview of how to form an LLC in Illinois.
Illinois LLC Costs:
Illinois LLC filing fee: $150
Illinois LLC annual report: $75
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Note: Our tax lesson is not as step-by-step as our LLC formation lessons, due to the uniqueness and variation among businesses. Taxes are usually not as straightforward as forming an LLC, and therefore, the information below is an overview, and not a comprehensive guide.
You will likely need to hire a local tax professional to make sure you meet all your Illinois tax obligations. We recommend using Thumbtack.
Do it yourself in Illinois
Register with IL Department of Revenue and get a State Tax ID Number
Illinois Revenue: How do I register with the Illinois Department of Revenue?
Personal Property Replacement Tax
Illinois LLCs are required to pay 1.5% of their net income to the IL Dept. of Revenue.
Sales and Use Taxes
If your Illinois LLC sells goods, you are required to collect and pay sales tax. You can register with the IL Dept. of Revenue as mentioned above. You’ll need to submit sales tax returns on a periodic basis to the state.
If you have employees, you need to:
– withhold federal, state, and payroll taxes from your employees’ wages
– get a Federal Tax ID Number for your LLC
– register with the Department of Employment and withhold payroll taxes.
– get unemployment insurance
– obey Illinois labor laws for workers’ compensation, temporary disability insurance, prepaid health care, and wage and hour programs.
Depending on your industry, where your business is located, how you are taxed by the IRS, and whether or not you have employees, will determine which additional taxes and forms are due.
Some examples of other taxes and forms due are:
- Use tax
- Individual income tax
- Income withholding tax
- Partnership and LLC tax
- Transient tax
- Accommodations tax
- Rental motor vehicle tax
- Tour tax
- Vehicle tax
- Car sharing tax
- Vehicle surcharge tax
- Cigarette and tobacco tax
- Liquor tax
- Fuel tax
- Local taxes
- And more
You can find more information from the Illinois Department of Revenue.
Calculating your tax obligations in Illinois can be complicated and if done improperly can negatively impact your LLC.
Hiring a tax professional will not only help you keep your Illinois LLC in compliance, but it will also give you an advisor to go to for other business questions.
You’ll want someone who’s a good fit for your company, makes you feel comfortable, and is willing to answer all of your questions. It should be someone you like personally as well as professionally. We recommend talking with at least 2-3 people before making your final decision.