On June 16, 2025, Illinois Governor JB Pritzker signed into law House Bill 2755. This bill includes three different tax amnesty programs covering all taxes administered by the Illinois Department Revenue, sales taxes owed by remote sellers to the Illinois Department of Revenue, and Illinois franchise taxes that are administered by the Illinois secretary of state.

The tax amnesty programs provide for full abatement of penalty and interest if the tax due by an eligible taxpayer is paid within the amnesty window for eligible tax periods. The following chart summarizes key provisions. 

Tax Types	Eligible Tax Periods	Amnesty Window
All taxes administered by the Illinois Department of Revenue	Taxable period ending after June 30, 2018, and before July 1, 2024	Oct. 1, 2025 – Nov. 15, 2025[1]
Sales taxes owed by a remote retailer	Periods from January 1, 2021, through June 30, 2026	Aug. 1, 2026 – Oct. 31, 2026
Franchise tax and license fees administered by the Illinois secretary of state	Tax periods ending after June 30, 2019, and on or before June 30, 2025	Oct. 1, 2025 – Nov. 15, 2025

A Q&A Review of Tax Amnesty Programs

The following are questions and answers about participating in these upcoming tax amnesty programs.

All Taxes Administered by the Department

Q: If I am a nonfiler, should I participate in the tax amnesty program or, instead, pursue a voluntary disclosure agreement?

A: It depends on your facts. Illinois’ voluntary disclosure program provides for a limited lookback period and penalty abatement; it does not provide for interest relief. Depending on the taxpayer’s facts, the voluntary disclosure program may provide benefits—such as a limited lookback period—that are not available with the tax amnesty program.

Q: I am a remote retailer. Which tax amnesty program should I consider participating?

A: There are four reasons why it may be prudent for a remote retailer to participate in the tax amnesty program that is open to remote retailers only. First, the amnesty period is later in time and, as such, the remote retailer can hold onto its cash longer. Second, Illinois’ remote retailer sales tax is of questionable validity. So hold onto your cash while the litigation continues. Third, the remote retailer tax amnesty period allows participants to pay sales tax due at a fixed rate and avoid measuring the local sales tax based on the destination sourcing rules. Fourth, the tax amnesty program for remote retailers allows for a payment plan, if needed.

Q: Can I participate in the tax amnesty program if I have any civil litigation pending in court in relation to state taxes?

A: No. There are also other limitations on being eligible to participate.

Illinois’ Remote Retailer Sales Tax Amnesty

Q: What is unique about being a “remote retailer” in Illinois?

A: Illinois has historically administered local sales/use tax for all retailers based on an origin sourcing rule. Prior to January 1, 2021, an out-of-state retailer with a sufficient economic nexus with Illinois was not required to administer local sales taxes. Commencing January 1, 2021, a remote retailer was required to source sales based on “destination sourcing” while a similarly situated in-state retailer remained subject to “origin sourcing,” as a general rule. Illinois’ sourcing rules are very complex. The Illinois Supreme Court previously declared Illinois’ long-standing local sale/use tax sourcing rules to be illegal. See Hartney Fuel Oil Co. v. Hamer (Ill. 2013).

The Illinois remote retailer amnesty program allows for a remote retailer to enter into an approved repayment plan with the Department of Revenue during the remote retailer amnesty period.

Q: Can I participate in the remote retailer tax amnesty program if I have any civil litigation pending in court in relation to any state taxes?

A: No. There are also other limitations on being eligible to participate.

Illinois’ Franchise Tax Amnesty

Q: Can I participate if I am party to any civil or administrative investigation or litigation concerning franchise taxes or license fees?

A: No. There are also other limitations on being eligible to participate.

For More Information

If you have any questions about this Alert, please contact Stephen DiBonaventura, C. Eric Fader, Keith Staats, any of the attorneys in our State and Local Tax Group or the attorney in the firm with whom you are regularly in contact.

 Notes

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.