Telecommunications Companies That Must Register With the Illinois Department of Revenue

The Telecommunications Excise Tax applies to intrastate and interstate taxes imposed on telephone services, cell phone service, two-way radio, channel service, and other electronic or message transmission services. Non-providers of internet access also fall under this jurisdiction.

Prepaid telephone calling arrangements do not have to pay telecommunication taxes, but are responsible for paying sales tax in certain instances.

Under the Simplified Municipal Telecommunications Tax Act, the tax rate for local government is capped at 6% and applies to municipalities whose ordinance is different than that of the city of Chicago.

This does not require voter approval, and municipalities who wish to be included, change, or abolish this tax rate must adopt an ordinance or resolution, then file a certified copy with the Local Tax Allocation Division at the Illinois Department of Revenue. All filings must take place by March 20 to take effect on the 1st of July, or by September 20 to take effect on January 1.

The Registration Process

  • New businesses in Illinois must obtain a business registration with the Illinois Department of Revenue.
    • - This is done through the My Tax Illinois electronic site and takes two days to process. Form REG-1, the Illinois Business Registration application needs to be completed and mailed to:

      Central Registration Division
      Illinois Department of Revenue
      PO Box 19030
      Springfield, IL 62794-9030
  • The corresponding schedule REG-1-T may also be required. If mailed, the process can take up to 8 weeks. The certificate of registration and tax number will be sent in the mail. The Certificate of Registration must be displayed in the business where it can be seen. Any updates can be made through the My Tax Illinois site.
  • In order to obtain an Illinois Sales Tax License, there is a free application with a turnaround of two business days. The type of business, owners, officers, and description of the activities are required. In most cases, this is automatically done by filing the business registration.

Renewal for Illinois Telecommunications Companies

Certificates of Registration are automatically renewed as long as compliance with all filing and payment obligations are current.

Sales tax licenses do not need renewal.

Required Telecom Taxes by the State of Illinois

The State of Illinois has various taxes, surcharges, and fees. These may differ based on the municipality and include the following:

  • Telecom Excise Tax Act
  • State IMF (Telecom Infrastructure Maintenance Fees)
  • State Universal Service Fund charge
  • Chicago Simplified Telecommunications Tax for Chicago customers
  • Simplified Municipal Telecommunications Tax (applies to all municipalities outside of Chicago),
  • State sales tax
  •  911 surcharge
  •  Telecom Relay Services and Equipment charge

Additional taxes and fees may apply. The Telecommunications Tax Return may be filed online at My Tax Illinois.

Telecom Tax Exemptions in Illinois

In Illinois, these telecom exemptions apply:

  • Sales in resale and interstate commerce
  • Sales to state universities for use
  • Sales to state and federal governments
  • Sales between parent companies and their subsidiaries

In addition, prepaid calling cards, data and e-mail, state and federal governments, and state universities are all exempt from the municipal telecommunications tax.

How to File a Voluntary Disclosure Agreement in Illinois

The Voluntary Disclosure program in Illinois provides a four-year lookback limitation period for businesses and eliminates all penalties when all taxes and interest due are paid within 60 days. Additionally, there will be no audits of this four-year period.

This is advantageous for businesses that have not complied with the Illinois tax law.

  • Businesses who voluntarily come forward are offered some form of protection by the Board of Appeals. To move forward, businesses wishing to establish an agreement with the Illinois Department of Revenue (IDOR) must complete the Application for Voluntary Disclosure (Form BOA-2). The Problems Resolution Division will review the documentation.
  • Businesses being represented by an attorney should complete the Power of Attorney form IL-2848 and have their business registered with My Tax Illinois.

Upon approval, Form BOA-2 is sent back to the company along with a letter outlining when and where the tax returns and payment should be made. The payment should be made within 30 days of approval, but a 60-day extension may be granted with a written request.

Businesses may be disqualified if they have been audited, the returns are not filed on time, taxes are not paid on time, or compliance is not followed. The Department of Revenue retains certain rights for auditing and cancellation.

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Conquer Illinois Telecom Tax Requirements Once and For All

If you need assistance with the registration, reporting, management, or compliance of your Illinois telecom tax, contact our team of experts today.

Our experienced agents have worked with business entities in Illinois and can help you conquer your communications taxes and fees.