New Sales Tax Record Retention Requirements for Illinois Businesses

If you are an Illinois retailer, the Illinois Department of Revenue (“IDOR”) recently added additional records you are required to keep.

Effective February 5, 2025, IDOR added 10 additional items retailers are required to maintain and produce to IDOR upon request. These are minimum requirements. Some businesses may need to maintain additional records in order to be in compliance with IDOR’s requirements.

The 10 additional items retailers are now required to maintain are:

1. Cash register tapes, point-of-sale system printouts, and any other data used to prepare the sales tax returns. Specifically, this data must include the date of the transaction, invoice or transaction number, description of the items sold, the selling price, and the amount of tax (or exempt status).

2. Bank statements for all business accounts.

3. Federal tax returns, including all schedules, work papers, and 1099-Ks.

4. Sales tax returns, including all schedules and workpapers.

5. Monthly statements supporting all 1099 K-1s the business receives.

6. A log of all cash disbursements to vendors, employees, and others.

7. Documentation for exempt and non-taxable receipts, including specifically the name of the exempt entity, the Illinois Account ID number, resale certificate, or interstate commerce records.

8. If a sale requires delivery, the purchaser’s name, street address, city, state, ZIP code and, if different, address of delivery location.

9. Any records IDOR previously directed the business to keep as the result of an audit.

10. Any other records IDOR deems necessary to verify the sales tax amount, including new technological advances and records specific to the business.

While many businesses may already be maintaining these records, other businesses should be aware of these new requirements. If a business does not keep these records, when the business is selected for a sales tax audit, IDOR will almost certainly propose additional tax and penalties. Maintaining these records will help ensure a smooth sales tax audit – or at least as smooth as a sales tax audit can be.