Vendor Discount Capped in Illinois
Effective January 1, 2025, the sales tax vendor discount will be capped at $1,000 per month. The discount is provided to taxpayers that file and pay their vendor’s use tax on time. Previously, there was no cap on the discount.
This change aims to reduce the compensation given to businesses for the administrative burden of collecting and remitting sales tax, as automation has made these tasks less labor-intensive.
The new cap will primarily impact businesses collecting over $57,000 in sales tax per month. Illinois businesses should review their tax systems and procedures to ensure compliance with this new limitation.
Please note that this is only an overview. For specific guidance, connect with our sales and use tax team here.