Illinois Tax Exempt Forms 2024 - 2025

Illinois has many different sales tax exemptions. Whether you are selling items or buying them, it is important to understand how they work and what documentation you need to qualify.

The state of Illinois offers several types of tax exemption forms for tax-free purchases. These exemptions are available to businesses, organizations, and individuals. Some are property tax exemptions, while others are sales tax exemptions. To qualify for an Illinois tax exemption, you must fill out the correct form and provide proper documentation.

Homeowners can receive property tax savings by filing a homestead exemption application. This can save homeowners approximately $950 each year. This savings is reflected on the second installment of a property tax bill. You can apply for a homestead exemption online or by visiting your local Assessor’s office.

You can also apply for a disability exemption. This allows homeowners to build on their residence without increasing the property taxes attributable to that improvement for up to four years. This includes adding rooms, installing new garages or outbuildings, and making repairs. The qualifications for this exemption include having a permanent and total disability as defined by the Social Security Administration or Veterans Affairs, a Class 2 or 2A IL Disabled Person identification card, or current year proof of Railroad or Civil Service disability benefits showing 100% disability.

To apply for a sales tax exemption, you must submit your request to the state of Illinois. Once you’ve been approved, the state will issue an E-number, which you must give to vendors before you can make tax-free purchases. If you need to update your information, you must file Form STAX-300-C, Sales Tax Exemption Business Information Update.

How to File Illinois Tax Exempt Forms

How to File Illinois Tax Exempt Forms?

To file for property tax exemptions, homeowners must submit an application with supporting documentation. The application must also be notarized. Photographs should be attached where applicable. The application must be submitted by the deadline. If the application is not approved, an appeal can be filed.

A taxpayer can claim a homestead exemption on their primary residence in Illinois. This exemption reduces the Equalized Assessed Value and is automatically renewed every year. To qualify for the exemption, a taxpayer must own and occupy the property as their primary residence on January 1 of each year. They must also be unable to engage in substantial gainful activity due to a medically determinable physical or mental impairment that can be expected to end in death or last for a continuous period of 12 months.

Nonprofit organizations operating in the state of Illinois can apply for a sales tax exemption E number. The process is free and can be completed online. The applicant must provide their name, address, and business information. They must also submit their articles of incorporation, if they are incorporated, or their constitution if they are unincorporated.

If the organization has a tax exemption number from another jurisdiction, they must notify IDOR before applying for an Illinois tax exemption number. This is important because the exemption may not be valid in Illinois.

Types of Exempt Forms in Illinois

  • ST-587 (Equipment Exemption Certificate): This form allows businesses to purchase equipment tax-free if the equipment is used primarily for manufacturing or assembling tangible personal property for sale or lease.
  • Sales Tax Exemption Certificate (STAX-70): This is used by organizations exempt from paying sales tax on purchases
  • Form IL-501 (Payment Coupon and Instructions): While not an exemption form per se, it’s used for making withholding tax payments, which can include exempt transactions.
  • ST-1 (Sales and Use Tax Return): This form is used for reporting and paying sales and use taxes, but also includes sections where businesses can claim exemptions on their eligible purchases.
  • ST-556 (Sales Tax Transaction Return): Used for reporting sales tax on items such as vehicles, aircraft, watercraft, and trailers, which may qualify for certain exemptions.