The Illinois Department of Revenue ST-556 Sales Tax Transaction Return form is a critical document for those selling items in Illinois that require titling or registration by a state agency, including vehicles, watercraft, trailers, and more. This form must be filed to report these sales, even if no tax is due, to avoid potential penalties. It can be completed and submitted electronically via MyTax Illinois or through preprinted paper forms available upon request. To ensure compliance and avoid any issues, sellers are encouraged to familiarize themselves with the form's requirements and complete it accurately.
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Navigating the intricacies of the Illinois Department of Revenue's Form ST-556 can seem daunting at first glance, but it's a crucial component for retailers selling certain types of tangible items in Illinois. This form, specifically designed for transactions involving items that must be titled or registered—such as vehicles, watercraft, aircraft, trailers, and mobile homes—ensures that sales tax is properly reported and paid. Retailers are mandated to file this form for each eligible transaction, even in cases where no tax is due, highlighting the form’s significance in maintaining compliance with state tax obligations. The option to file electronically through MyTax Illinois simplifies the process, although preprinted paper forms are available upon request for those who prefer or require them. Mistakes on preprinted forms can be rectified by marking them "VOID" and retaining them for records, avoiding potential discrepancies in reporting. Moreover, the form encompasses various sections to be filled out, including the purchaser’s information, item description, delivery date, and any applicable trade-ins or exemptions, which play a pivotal role in the calculation of the sales tax due. Retailers must also navigate specific provisions, such as the trade-in credit limit for certain vehicles and the criteria for tax-exempt sales, including sales to nonresidents or for specific uses like resale or rental. These elements underscore the complexity and comprehensiveness of Form ST-556 in ensuring tax compliance for retail sales of titled or registered items in Illinois.
Illinois Department of Revenue
ST-556 Sales Tax Transaction Return Instructions (1) for Sales from Illinois Locations
General Information
Who must file Form ST-556?
If you sell items at retail in Illinois that are of the type that must be titled or registered by an agency of Illinois state government (i.e., vehicles, watercraft, aircraft, trailers, and mobile homes), you must report these sales on Form ST‑556, Sales Tax Transaction Return. Do not file Form ST‑556 if the item is being sold for lease. Instead, use Form ST‑556‑LSE, Transaction Return for Leases. Note, however, that you also must file Form ST‑556 if you are a leasing company selling such items at the end of a lease, but use the Form ST‑556 instructions for leasing companies selling at retail (ST‑556[2]) to assist you in completing the return properly.
Do I need to file Form ST-556 if no tax is due?
Yes. Anytime you sell an item at retail in Illinois that is of the type that must be titled or registered by an agency of Illinois state government, you must report the sale on Form ST‑556, regardless of whether you are reporting tax due. Failure to file Form ST‑556 as required subjects you to possible penalties for each transaction that goes unreported.
How can I file Form ST-556?
Form ST‑556 can be filed electronically using MyTax Illinois at mytax.illinois.gov. The Illinois Department of Revenue also issues preprinted paper forms in limited quantities. You can request preprinted returns by calling our Central Registration Division at 217 785-3707. You can also request preprinted returns using MyTax Illinois. Note that preprinted forms display information for each of your business locations. Related sales and use tax forms are available on our website at tax.illinois.gov.
What if I make a mistake while filling out a preprinted paper form?
If you make a mistake on a preprinted paper Form ST‑556, write “VOID” across the form. Keep the voided return in your records for at least 42 months. Do not send the form to us.
What if I need help?
If you need help, call us at 1 800 732-8866 or 217 782-3336, call our TDD‑telecommunications device for the deaf at
1 800 544-5304, or visit our website at tax.illinois.gov.
Specific Instructions
1 Enter the purchaser’s name and address
The purchaser’s name and address must be the same as the name and address on the application for title or registration. If there is more than one purchaser, be sure to enter each name.
2 Describe the item sold
Check the correct box (A – E) to show the type of item sold. If the type of item sold is not identified in boxes A – E, check box F and enter the type of item sold.
Check the correct box to show whether the item sold is new or used.
Next, enter the appropriate identification number for the item sold, such as a vehicle identification number (VIN) for vehicles, trailers, and mobile homes, a hull identification number (HIN) for watercraft, or (N) number for aircraft.
Finally, enter the year, make, body style, and model of the item sold.
Note: If you sold more than one type of item (e.g., a watercraft and a trailer) or more than one item of the same type (e.g., three motor vehicles) you generally must complete a separate Form ST‑556 for each item sold. If, however, you wish to report sales for resale or sales for use as rolling stock of more than one of the same type of item to the same purchaser with the same date of delivery, you may file Form ST‑556‑R, Resale and Rolling Stock Fleet Exemption Schedule, with a single Form ST‑556.
3 Enter the date of delivery
Enter the month, day, and year in which the purchaser took possession of the item.
Note: This return is due no later than 20 calendar days after the date of delivery.
4 Describe the trade-in, if any
If you did not claim a qualified trade‑in, skip this section and go to Section 5.
If you claimed a qualified trade‑in, enter the type of item traded in (e.g., automobile, truck, airplane, boat, trailer). Next, enter the appropriate identification number, year, make, body style, and model of the trade‑in.
What is a qualified trade-in? A qualified trade‑in is an item
•that the purchaser gives you to reduce the selling price (in part or in full) of the item sold;
•that you are allowed to subtract from the selling price; and
•that you are in the business of selling.
You are “in the business of selling” a particular kind of item if you hold yourself out to the public as being engaged in (or habitually engage in) selling such items.
Example: You may claim the trade‑in of a boat on an auto if you are in the business of selling both boats and autos.
However, you may not claim the trade‑in of a boat on an auto if you are in the business of selling only autos.
Note: For sales made on or after January 1, 2020, up to and including December 31, 2021, for purposes of calculating your Sales Tax due, you cannot claim trade‑in credit exceeding $10,000 for any first division motor vehicle that was traded in during the sale being reported on Form ST‑556. For sales made on or after January 1, 2022, the $10,000 trade‑in credit limit no longer applies.
ST‑556 (1) Instructions (R‑12/21)
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5 Exempt or sale to a nonresident
If the sale is to an Illinois resident and also taxable, skip this section and go to Section 6.
If the sale is exempt from tax, check the correct box (A – F), and complete Section 6, Lines 1 and 2.
If the sale is to a nonresident purchaser who is subject to tax
(i.e., a non‑reciprocal purchaser), complete box A as instructed below and complete all of Section 6.
If you are not required to submit title or registration paperwork on the item, send the return directly to us at:
ILLINOIS DEPARTMENT OF REVENUE
RETAILERS’ OCCUPATION TAX
PO BOX 19042
SPRINGFIELD IL 62794-9042
A. Sold to a nonresident purchaser
Check this box if you sold an item to a nonresident purchaser who is not an out‑of‑state dealer, and who took possession of the item in Illinois, and either
•you issued a drive‑away permit for the item sold; or
•the purchaser transferred out‑of‑state license plates to the item sold.
If you issued a drive‑away permit, enter the drive‑away permit number and the two-letter state abbreviation of the purchaser’s state of residence in the space provided. If the purchaser transferred current out‑of‑state license plates to the item sold, enter the out‑of‑state license plate number and the two-letter state abbreviation in the space provided.
Non-Reciprocal Buyer
Exemption is determined by whether the purchaser’s state gives Illinois residents a nonresident purchaser exemption on their purchases of items that will be titled in Illinois. See ST‑58, Reciprocal ‑ Non‑Reciprocal Vehicle Tax Rate Chart, available on our website at tax.illinois.gov, and the instructions for Section 6, Line 4 below for more information.
Note: If you claim the nonresident purchaser exemption, keep a copy of the purchaser’s valid out‑of‑state driver’s license in your records as proof of nonresidency. You also are responsible for obtaining a signed certification documenting the purchaser’s eligibility for the nonresident purchaser exemption. As a condition of claiming this exemption, nonresident purchasers must certify that they are not residents of Illinois. See ST‑588, Nonresidency Exemption Certification for Sales and Leases of Motor Vehicles and Trailers, available on our website at tax.illinois.gov. Retain this certification in your records as proof that no tax was due on the sale of the specified item.
Indiana Purchaser of an RV or Cargo Trailer
If you sell a recreational vehicle or a cargo trailer to a purchaser that will title or register that item in Indiana, the transaction is exempt from Illinois tax if a drive‑away permit is issued or the Indiana purchaser has vehicle registration plates to transfer to the item upon returning to Indiana. You must check Section 5, box F, “Other” and enter “recreational vehicle” or “cargo trailer” on the line provided.
B. Sold for resale to a DEALER
Check this box if you sold the item to either an Illinois or out‑of‑state dealer for resale.
•If you sold to an Illinois dealer, enter the dealer’s account ID number in the space provided.
•If you sold to an Illinois dealer as junk or salvage or for parts, enter “Junked,” “Salvage,” or “Parts Only” after the account ID number.
•If you sold to an out‑of‑state dealer, enter “Out‑of‑State Dealer” in the space provided for the account ID number.
Keep a completed Form CRT‑61, Certificate of Resale, in your books and records for documentation.
C. Sold to an exempt organization
Check this box if you sold the item to an exempt organization that has an active Illinois Sales Tax exemption “E” number, such as:
•a governmental body
•a school
•a religious organization
•a charitable organization
In the space provided, enter the organization’s active Illinois Sales Tax exemption “E” number. The purchaser must be the organization itself rather than a member or officer of the organization. The item must be titled or registered in the organization’s name and paid for with the organization’s funds. The organization’s exemption number must have been in effect on the day you made the sale.
D. Sold to an interstate carrier for hire for use as rolling stock Check this box if you sold an item for use as rolling stock to haul persons or commodities for hire in interstate commerce. In the space provided, enter the certificate of authority number. Keep
a properly completed Form RUT‑7, Rolling Stock Certification, in your books and records for documentation.
E. Sold for rental use
Check this box if
•you sold the item to a business that is registered to collect Automobile Renting Occupation Tax; and
•the purchaser will use the item for rental purposes in rental agreements of one year or less.
Enter the purchaser’s Illinois Automobile Renting Occupation Tax account ID number.
F. Other
Check this box if the sale is exempt for a reason not identified in boxes A – E.
For example:
•You sold a recreational vehicle or cargo trailer to a purchaser that will title and register the item in Indiana and you have issued a drive‑away permit or the Indiana purchaser has vehicle registration plates to transfer to the item upon returning to Indiana. In the space provided, enter “recreational vehicle” or “cargo trailer.”
•You delivered (or caused to be delivered) an item to a purchaser outside Illinois. In the space provided, enter “Delivered Out‑of‑State.”
•You sold the item to a foreign consul who has a card from the U.S. Department of State declaring that the foreign consul does not have to pay sales tax on that item. In the space provided, enter “Foreign Consul.”
•You will use the item for your own interim use. For the item to remain exempt from sales or use tax, it must remain in your sales inventory and be available for sale at all times. In the space provided, enter “Interim Use”.
If you have aircraft or watercraft that you have purchased for resale in your sales inventory and you use these items for demonstration or business purposes, you must pay Illinois Use Tax on your cost price of these items if you hold them for more than 18 months. If you later sell the items and collect Illinois Sales Tax, you cannot claim credit for any Illinois Use Tax you may have paid.
6 Enter the price, and figure the tax
Note: When completing Section 6, round to the nearest dollar by dropping amounts of less than 50 cents and increasing amounts of 50 cents or more to the next higher dollar.
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Line 1 Enter the selling price, including accessories, federal excise taxes, freight and labor, dealer preparation, documentary fees, and any rebates or incentives for which you as a dealer receive reimbursement. Do not subtract the value of any rebate made directly to the customer. In general, any cost passed on to the customer as part of the sale of an item and for which gross receipts are received should be included in the selling price. Note: If you are selling a new truck weighing 33,000 pounds
or more or a new trailer or semitrailer chassis weighing 26,000 pounds or more, you may exclude the federal excise tax from the selling price.
Line 2 If you claimed a qualified trade‑in (see Section 4), enter the total trade‑in credit or value (see Note below). You must identify the traded‑in item in the spaces provided in Section 4. If you claimed an exemption in Section 5 and no tax is due, you do not need to complete the remaining Lines 3 – 14 of Section 6. Remember that you and all purchasers must sign the return.
Line 3 Subtract Line 2 from Line 1.
Line 4 Calculate your tax due using the following to determine the appropriate rate:
•If you made this sale at your standard business location (i.e., the location printed on the front of the paper
Form ST‑556 returns the Department issues to you), multiply Line 3 by the tax rate printed on your return.
•If you made this sale at an off‑site location (e.g., a tent sale), follow the instructions on ST‑23, How to Report Off‑Site Sales on Form ST‑556, Sales Tax Transaction Return, or Form ST‑556‑LSE, Transaction Return for Leases, available on our website at tax.illinois.gov.
•If you made this sale to a nonresident who is taking delivery of the item in Illinois but who will title it in a state that does not have a reciprocal nonresident purchaser exemption
for Illinois residents, multiply Line 3 by the nonresident’s state sales tax rate, up to 6.25 percent. See ST‑58, Reciprocal ‑ Non‑Reciprocal Vehicle Tax Rate Chart, available on our website at tax.illinois.gov.
Note for business locations in Cook, DuPage, Kane, Lake, McHenry, or Will County when the customer’s address is in Chicago:
If your sales location is in Cook, DuPage, Kane, Lake, McHenry, or Will County and the purchaser’s address on Form ST‑556, Section 1, is within the corporate limits of the city of Chicago, you must collect an additional 1.25 percent (.0125) Chicago Home Rule Use Tax. To help you calculate the tax due on one of these sales, we preprint a combined rate below Line 4 on the paper Form ST‑556 returns the Department issues to you. This combined rate includes your tax rate, plus the additional 1.25 percent Chicago Home Rule Use Tax. To figure the correct tax due, multiply the amount subject to tax on Line 3 by the combined rate. Enter the result on Line 4.
Line 5 - Read these instructions if your buyer’s address is in Cook, DuPage, Kane, Lake, McHenry, Will, Madison, or St. Clair County.
If the item will be titled or registered in an area in which tax has been imposed by the Regional Transportation Authority or Metro‑East Transit District, the purchaser may owe additional tax. If your sales location is within the boundaries of one of these areas, the additional tax is already included in your combined tax rate. If, however, your sales location falls outside these boundaries, you are not required to collect any additional use tax, but you may do your purchaser the courtesy of collecting the additional tax so that the purchaser will not be billed for it later.
If you have determined that the purchaser is subject to the additional use tax and you have decided to collect and remit that additional tax on the purchaser’s behalf, multiply the amount on Line 3 by any difference in rates (expressed as a decimal), and enter the result on Line 5. Finally, enter the name of the Illinois county in which the purchaser’s address is located. If the purchaser’s address falls within the limits of an Illinois city or village, enter the name of the city or village. If the purchaser’s address falls within Madison or St. Clair County, enter the name of the township in which the address is located.
Do not report municipal or county home rule use tax on Line 5. Line 6 Add Lines 4 and 5.
Line 7 If you are filing this return and paying the tax due within 20 days of the date of delivery entered in Section 3, multiply Line 6 by the rate printed on your return.
Note: Line 7a is preprinted only if you have a business location in the Metro-East Mass Transit District portion of St. Clair County.
Line 7a The Illinois Department of Revenue is responsible for collecting and administering the fee imposed in the Metro‑East Mass Transit District on items that are required to be titled or registered in Illinois. Multiply Line 3 by 0.5 percent (0.005).
•If the result is less than $20, enter the result on Line 7a.
•If the result is $20 or more, enter $20 on Line 7a.
Line 8 Subtract Line 7 from Line 6. If you calculated an amount on Line 7a according to the above instruction, subtract Line 7 from Line 6, and then add to that total the amount on Line 7a.
Line 9 If we have notified you that you have an overpayment credit on your account, you may use this overpayment credit to pay some or all of the tax due on this return. Enter the amount you wish to use.
Line 10 This credit is applicable only to lessors selling previously leased items at the expiration of the lease term. See Form ST‑556 instructions for leasing companies selling at retail (ST‑556[2]) for instructions on how to claim a credit for tax paid on an item you are now selling at the end of a lease.
Line 11 If you collected more tax than is due on this sale, enter the amount you overcollected.
Line 12 Subtract Lines 9 and 10 from Line 8 and add Line 11.
Line 13 If you have a credit memorandum and you wish to use it towards what you owe, enter the amount you are using on Line 13.
Line 14 Subtract Line 13 from Line 12, and enter the amount due. Also, enter the identifying number from the remittance you are sending to pay the tax due on this return. If you are filing more than one Form ST‑556, enclose a separate remittance for each return.
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Sign the return
Both the seller and all purchasers must sign the return.
If you claimed a qualified trade‑in for the item sold, the signatures also declare that the title of the traded‑in item has been properly assigned and surrendered to the seller.
Penalty and Fee Information
We will bill you for any amounts owed, including the following penalties and fees:
•You owe a late filing penalty if you do not file a processable return by the due date.
•You owe a late payment penalty if you do not pay the amount you owe by the original due date of the return.
•You owe a bad check penalty if your remittance is not honored by your financial institution.
•You owe a cost of collection fee if you do not pay the amount you owe within 30 days of the date printed on a bill that we send you.
•You owe a nonfiling penalty for transaction returns if you do not file a processable transaction return (ST‑556, Sales Tax Transaction Return, or ST‑556‑LSE, Transaction Return for Leases) by the due date, but only if no tax is due on the return.
For more information, see Publication 103, Penalties and Interest for Illinois Taxes, available on our website at tax.illinois.gov.
Printed by authority of the State of
Illinois
200 copies, PO #: 2220140
Page 4 of 4
Completing the ST-556 Illinois form accurately is crucial for businesses that sell items requiring title or registration by an agency of the Illinois state government. To assist in proper completion and submission, here's a step-by-step guide:
Once completed, ensure the form is submitted by its due date to avoid potential penalties. Filing electronically through MyTax Illinois streamlines the process, but paper forms are also available upon request. Keeping a record of your submission and any correspondence from the Illinois Department of Revenue is recommended for at least 42 months post-filing.
Who needs to file Form ST-556 in Illinois?
Form ST-556 must be filed by retailers who sell items in Illinois that require a title or registration by an agency of the Illinois state government. This includes vehicles, watercraft, aircraft, trailers, and mobile homes. If you are selling these items for lease, use Form ST-556-LSE instead. However, if you are a leasing company selling these items at the end of a lease, you must file Form ST-556 using instructions specifically for leasing companies.
Is Form ST-556 required even when no tax is due?
Yes, irrespective of whether tax is due, selling an item that must be titled or registered in Illinois obligates you to report the sale on Form ST-556. Not reporting these transactions can lead to penalties for each unreported sale.
How can I file Form ST-556?
Form ST-556 can be filed electronically through the MyTax Illinois website. Preprinted paper forms are also available in limited quantities upon request by contacting the Central Registration Division or through MyTax Illinois as well. These preprinted forms include details specific to your business locations.
What should I do if I make a mistake on a preprinted paper Form ST-556?
If a mistake is made on a preprinted paper version of Form ST‑556, you should write "VOID" across the form and keep the voided return for your records for at least 42 months. Do not send this voided form to the Illinois Department of Revenue.
Where can I get help with Form ST-556?
Assistance with Form ST-556 is available by calling the provided phone numbers or visiting the Illinois Department of Revenue's website. Resources and additional forms related to sales and use tax are also accessible online.
How do I describe the item sold on Form ST-556?
When completing Form ST-556, you must indicate the type of item sold (e.g., vehicle, watercraft), whether it is new or used, and provide the identification number pertinent to the type of item (VIN for vehicles, HIN for watercraft, etc.). The year, make, body style, and model of the item must also be specified. In cases where multiple items or types of items are sold, generally, a separate Form ST-556 is required for each.
What constitutes a qualified trade-in on Form ST-556?
A qualified trade-in involves an item given to you by the purchaser to lessen the selling price of the item sold, which you are permitted to deduct from the selling price. Additionally, the trade-in must be an item you are in the business of selling. Note that as of January 1, 2020, the trade-in credit for a first division motor vehicle cannot exceed $10,000 for the purposes of calculating sales tax due.
Filling out the ST-556 Illinois form, which is essential for reporting sales at retail of certain items that must be titled or registered in Illinois, can sometimes be tricky. Here are nine common mistakes people often make when completing this form:
Not filing the ST-556 form when no tax is due: Regardless of whether tax is owed on a sale, the ST-556 form must be submitted for any retail sale of an item requiring title or registration by an Illinois state agency. Not doing so could lead to penalties.
Incorrect purchaser information: The name and address of the purchaser must exactly match what's on the title or registration application. If this information is incorrect or incomplete, it can cause delays or rejections of the form.
Failing to describe the item sold accurately: Whether it's new or used, or what kind of vehicle or watercraft it is, each detail about the item sold must be clearly and correctly identified on the form.
Inaccurate date of delivery: The delivery date is crucial for determining when the form is due. Providing the wrong date can lead to unintended late submissions.
Overlooking the trade-in section: If a qualified trade-in is part of the sale, omitting this information or providing incomplete details can result in an incorrect calculation of the tax due.
Misunderstanding exempt sales: Misclassifying a sale as exempt when it isn't, or failing to provide adequate documentation for exemption, can lead to discrepancies and potential penalties.
Incorrectly entering the sale price or omitting items from the sale price: The total sale price, including accessories and other taxable items, must be accurately reported to ensure the correct tax calculation.
Wrong tax calculation: The tax rate applied must be correct for the location of the sale and the type of item sold. Applying the wrong rate can result in either an underpayment or overpayment of taxes.
Not retaining a copy of the form and supporting documentation: Recordkeeping is essential for verification and potential audit purposes. Not keeping a copy of the completed form and relevant documentation can lead to complications.
Attention to detail when filling out the ST-556 form is paramount. Avoiding these common mistakes will help ensure the process is smooth and penalty-free.
When handling transactions in Illinois that involve items requiring a title or registration, like vehicles, watercraft, and mobile homes, the Form ST-556 is crucial. However, to ensure compliance and smooth processing, several other forms and documents might be necessary alongside Form ST-556. Here’s a brief overview of some of these key documents:
Together, these documents and forms create a comprehensive toolkit for businesses and individuals dealing with taxable transactions of titled or registered items in Illinois. Each form plays its part in ensuring tax compliance, whether it pertains to reporting a sale, declaring a trade-in, or claiming an exemption. Keeping a close tab on the requirements and duly submitting these documents can significantly ease the complexities often associated with tax reporting and compliance.
Form ST-556-LSE, Transaction Return for Leases: This form is closely related to the ST-556 form in that it is used for reporting transactions involving items that must be titled or registered (such as vehicles and trailers), but it is specifically designed for leased items rather than sold items. Both forms require information on the item and the transaction but are used in different contexts depending on whether the item is being sold or leased.
Form ST-556-R, Resale and Rolling Stock Fleet Exemption Schedule: Similar to the ST-556 form, this document is used for transactions requiring title or registration. However, Form ST-556-R is intended for sales that qualify for resale or rolling stock exemptions and is to be filed in conjunction with a single ST-556 form when multiple items are sold to the same purchaser. It extends the reporting capability of the ST-556 form to cover specific bulk sales under qualifying conditions.
Form RUT-7, Rolling Stock Certification: This form is related to the ST-556 as it deals with sales of items intended for use as rolling stock, meaning they are used to haul goods or people in interstate commerce. When an item sold is claimed as rolling stock (for exemption purposes), Form RUT-7 is required for documentation, resembling the exemption claim process on the ST-556.
Form CRT-61, Certificate of Resale: Like the ST-556, Form CRT-61 involves the sale of tangible personal property. However, CRT-61 is specifically for items that will be resold and thus not subject to sales tax at the time of the transaction. Sellers retain CRT-61 to substantiate why sales tax was not collected, much like how certain sales are reported on the ST-556.
Form ST-58, Reciprocal - Non-Reciprocal Vehicle Tax Rate Chart: This document is used in conjunction with the ST-556 to determine the appropriate tax rate for sales to nonresident purchasers based on reciprocity agreements between Illinois and other states. It guides sellers on how to accurately complete the ST-556 form when the tax status might vary due to the purchaser's residency.
Form ST-588, Nonresidency Exemption Certification for Sales and Leases of Motor Vehicles and Trailers: This certification form supports the ST-556 by verifying a nonresident purchaser's eligibility for tax exemption on vehicles or trailers that will be titled and registered outside Illinois. It shares a purpose with the ST-556 in ensuring accurate tax reporting for interstate transactions.
Form ST-23, How to Report Off-Site Sales on Form ST-556, Sales Tax Transaction Return, or Form ST-556-LSE, Transaction Return for Leases: ST-23 provides specific instructions for sellers who need to report sales transactions conducted away from their standard business location, using either ST-556 or ST-556-LSE forms. It is similar to the ST-556 in that it details how to correctly report and file taxes for unique sales situations.
When filling out the ST-556 Illinois form, accuracy and attention to detail are essential. To help guide you through the process, here are 7 tips on what you should and shouldn't do:
Filing the ST-556 form with due diligence can save sellers from future legal and financial penalties. It’s also advised to seek assistance if there are any uncertainties during the filling process to ensure compliance with all guidelines established by the Illinois Department of Revenue.
Understanding the Illinois Department of Revenue ST-556 form can be challenging, with several misconceptions affecting how people approach filing and compliance. Below are five common misconceptions about the ST-556 form, each explained to provide clarity:
Clarifying these misconceptions is essential for accurate and timely filing of the ST-556 form, which plays a key role in reporting taxable sales transactions in Illinois. Whether you are a new business owner or have been in operation for years, staying informed about the requirements can help avoid penalties and ensure that your business complies with Illinois tax laws.
Filing the ST-556 form is mandatory for retailers in Illinois when selling items that require titling or registration by an Illinois state agency, such as vehicles, watercraft, aircraft, trailers, and mobile homes. This applies even if no tax is due on the sale.
The ST-556 form can be filed electronically through MyTax Illinois or by using preprinted paper forms issued by the Illinois Department of Revenue, which are available in limited quantities.
If a mistake is made on a preprinted paper form, the word "VOID" should be written across the form, and it should be kept in the seller's records for at least 42 months without sending it to the Department of Revenue.
For help with the ST-556 form, retailers can contact the Illinois Department of Revenue directly by phone or visit their website for more information and related sales and use tax forms.
When filling out the ST-556 form, the item sold must be fully described, including selecting the correct box for the type of item, whether it's new or used, and including specific identification numbers like VIN for vehicles.
If a sale involves a trade-in, the form allows for the inclusion of trade-in details, but starting from January 1, 2020, the trade-in credit that can be claimed is limited to a maximum of $10,000 for first division motor vehicles.
Exemptions such as sales to nonresidents or for resale can be indicated on the form. Documentation such as a purchaser's out-of-state driver’s license or a certificate of resale may be required to substantiate these exemptions.
Sellers are responsible for accurately calculating and reporting the tax due, including making adjustments for trade-ins, exemptions, and applying the correct tax rates based on the item's location and the purchaser's residency status.
Penalties may be imposed for late filing, late payment, submitting a bad check, not paying the amount owed within 30 days of billing, or failing to file a transaction return when required, even if no tax is due.
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