Illinois Business Compliance Checklist
Illinois has a corporation franchise tax on capital (not just LLCs), Chicago's higher minimum wage, and one of the more complex state tax environments. This page covers everything from filing fees to sales tax to hiring laws.
$150
$75
Every year
6.25%
state base rate
Yes
1. Entity Formation
| LLC filing fee (Articles of Organization) | $150 |
| Corp filing fee (Articles of Incorporation) | $150 |
| Registered agent required | Yes — must have a physical address in the state |
| Publication requirement | No |
| Processing time | ~7 business days (expedited available for extra fee) |
2. Annual Maintenance
| Annual/periodic report | Every year — fee $75 |
| Franchise tax | Franchise tax on corporations (not LLCs); rate applied to paid-in capital. |
3. Sales Tax
| State base rate | 6.25% |
| Combined rate range (with local) | 6.25% – 11.5% |
| Economic nexus (out-of-state seller) | $100,000 OR 200 transactions per year |
| Marketplace facilitator law | Yes — marketplaces (Amazon, Etsy) collect on your behalf. |
Need to check nexus across multiple states? Use our Sales Tax Nexus Checker.
4. Employer Requirements
| Minimum wage | $15.00/hr (2025) |
| Paid sick leave law | Statewide mandate |
| Non-compete enforceability | Restricted — banned below income threshold; enforceable for high earners |
| Contractor classification test | Common-law (IRS) test |
Full employment law breakdown: Illinois Hiring Laws.
5. Workers' Compensation
Illinois allows private-market workers' comp insurance (competitive market). Coverage is required starting with your first employee.
Estimate your premium with our Workers' Comp Calculator.
6. State Income Tax
Flat rate: 4.95% on all income.
Compliance by Business Structure
Pick your structure to see structure-specific compliance items.
What Makes Illinois Distinctive
Compliance quirks and rules that separate Illinois from other states — worth understanding before you file.
- Illinois charges $150 for LLC formation and $75 for the annual report — moderately above average.
- Illinois levies a Corporation Franchise Tax on corporations (not LLCs) based on paid-in capital — typically a few hundred dollars for small corps but scales with capital.
- Illinois requires an Assumed Business Name filing at the county level (not state) for DBAs.
This is a reference, not legal advice.
State fees and rules change. Verify current values with the Illinois Secretary of State, Department of Revenue, and Department of Labor before filing. For complex situations, consult a licensed CPA or attorney.