The Illinois legislature recently mandated electronic filings for certain sales and use and withholding income tax filings as of January 1, 2018. H. B. 0821 was passed in both houses by May 2017 and signed into law on August 24, 2017 by Governor Rauner creating Public Act 100-0303. In September 2017, the Illinois Department of Revenue published an informational bulletin, FY 2018-05-A, explaining the Department’s implementation of P.A. 100-0303. The Bulletin states that as of January 1, 2018 specific sales and use tax and withholding income tax filers are required to file certain forms electronically. Failure to file the appropriate sales and use tax forms electronically results in the disallowance of timely filing discounts/collection allowances claimed on those forms.

Sales and Use Tax Changes:

Taxpayers with annual gross receipts averaging $20,000 or more are required to file electronically. The Department noted in FY 2018-05-A that it would determine who qualifies for the electronic filing requirements and issue notices to those taxpayers. As such, taxpayers that are required to file electronically should have been notified by the Department.

The following forms are impacted by P.A. 100-0303:

  • Form ST-1, Sales and Use Tax and E911 Surcharge Return
  • Form ST-8, Tire User Fee
  • Form ST-4, Metropolitan Pier and Exposition Authority Food and Beverage Tax Return
  • Form ST-14, Chicago Soft Drink Tax Return
  • Form MC-1, Medical Cannabis Cultivation Privilege Tax Return

If the above forms are not filed electronically, the 1.75 percent timely filer discounts/collection allowances on ST-1, ST-4, ST-14, and MC-1, the 3 percent discount of the E911 surcharge and assessment fee on Form ST-1, Schedule B, and the $0.10 per tire collection allowance for the tire user fee on Form ST-8 will be disallowed. Additionally, if a taxpayer is unable to file electronically because he does not have internet access or it is a hardship to do so, the Department will allow waivers on a case by case basis, if needed.

Withholding Tax Changes:

P.A. 100-0303 gives the Department authority to require Forms IL-941, IL-941-A and the federal Form W-2 to be filed electronically. The Department did not state a penalty for not filing the withholding income tax forms electronically.

All electronic filings for both sales and use taxes and withholding income tax can be completed on your MyTax Illinois online account.

Manual filings and requirements for paper forms have long plagued Illinois taxpayers and citizens but that appears to be changing. For example, the January 1, 2018 timeline noted by the Department follows the Illinois Supreme Court’s mandate that Illinois circuit court cases must be filed electronically starting the same day. Electronic filings with state governments are becoming more common both in Illinois and across the country; we expect to see the electronic filing mandate continue to spread.