Written By: Ayla Zammit & Ashley Trabaris
August IL Sales Tax Holiday – August 7-16
For the first time since 2022, Illinois shoppers and retailers will benefit from a statewide back to school sales tax holiday. Governor JB Pritzker signed Public Act 104-0468 as part of the FY27 budget package on June 16, 2026, creating a ten day reduced rate period on qualifying clothing, footwear, and school related items.
This sales tax holiday is effective August 7, 2026, through August 16, 2026. During this ten-day period, the State's portion of sales tax is reduced to 1.25% (a 5.00% reduction from the normal 6.25% rate) on any qualifying item purchased and paid for in full during this holiday. Below is a high-level overview of the qualifying items for consumers and reporting requirements for retailers.
Qualifying Items
- Clothing and footwear with a retail selling price of $125 or less per item.
- Most school supplies used by students in the course of study
- The $125 threshold does not apply to qualifying school supplies.
Non-Qualifying Items
- Any clothing item with a retail selling price of $125 or more, and other accessories (ex. Handbags and cosmetics)
- Sports or recreational equipment
- Protective equipment
- Specified footwear (ballet, tap, cleated or spiked athletic shoes, roller and ice skates, ski boots, or waders and fins)
- School supplies NOT used by students in the course of study
Reporting for Retailers
- Schedule K-12, Sales and Use Tax Holiday Schedule, was created to report sales of qualifying items sold during the sales tax holiday. Retailers should continue reporting all taxable sales on Form ST-1 as they normally would, including qualifying sales tax holiday items.
- Schedule K-12 is used to calculate a credit for the 5.00% Illinois State sales tax that was not collected on qualifying holiday sales, reducing the amount of tax due.
- When calculating the retailer's discount for filing on time, retailers may use the amount of tax that would have been due before the State's 5% sales tax reduction was applied.
More detailed information can be found on the Bulletin issued by IDOR, FY 2026-30.
Please reach out to a member of your Porte Brown advisory team if you think you can benefit from this program or have any questions.
