By Margaret Eisler
The Illinois Department of Revenue has announced the counties and municipalities that are imposing a cannabis retailers’ occupation tax rate change effective January 1, 2025. (Illinois Dept. of Rev. Info. Bulletin No. FY 2025-09, 11/01/2024.)
Municipal and county cannabis retailers’ occupation taxes.
Effective January 1, 2025, certain taxing jurisdictions have, by ordinance, imposed or changed their municipal or county cannabis retailers’ occupation tax on the gross receipts from sales of adult use cannabis. The county and municipal taxes are in addition to the Illinois retailers’ occupation tax on general merchandise and any locally-imposed retailers’ occupation tax on general merchandise, which also apply to sales of adult use cannabis.
These taxes are not imposed on cannabis purchased under the Compassionate Use of Medical Cannabis Program Act.
Tax rates.
Municipalities may impose a tax on retail sales of cannabis, other than medical cannabis, at a rate up to 3%, imposed in 0.25% increments.
Counties may impose a tax, also in 0.25% increments, on retail sales of cannabis, other than medical cannabis, at the following rates: in unincorporated areas of the county, a rate up to 3.75%, and in a municipality located in the county, a rate up to 3%.
For implementation of the tax by the Department, municipalities and counties must submit their ordinances to the Department by April 1 for July 1 implementation, and by October 1 for implementation on the following January 1.
Dispensaries must adjust cash registers and any computer program so that beginning on January 1, 2025, they will collect and pay the correct tax rate.
January 2025 changes.
The municipalities of Crestwood, East Alton, Island Lake and West City are imposing municipal cannabis retailers’ occupation tax rate changes beginning January 1, 2025.
Effingham County, Wabash County and White County are imposing county cannabis retailers’ occupation tax rate changes beginning January 1, 2025.
To verify combined state and local retailers’ occupation tax rates (i.e., state and local taxes) on adult use cannabis, taxpayers should go to the MyTax Illinois Tax Rate Finder and select rates for January 2025.
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