Rates last verified: August 26th, 2026
Sources: Illinois Department of Revenue; Illinois Compiled Statutes; Illinois State Police Statewide 911 Division. Full citations at the bottom of this page.
Illinois does not fold telecom into its sales tax. It runs a dedicated Telecommunications Excise Tax at the state level, authorizes a Simplified Municipal Telecommunications Tax on top, and funds 911 through per-connection surcharges. Chicago sits outside most of this machinery: the city administers its own municipal telecom tax and its own 911 surcharges under separate authority.
Quick Facts
| Item | Illinois Treatment |
|---|---|
| State Telecommunications Excise Tax | 8.65%, effective July 1, 2025 (previously 7%); the 1.65 point increase is designated as the statewide 988 surcharge |
| Simplified Municipal Telecommunications Tax | Up to 6%, in quarter-point increments, set by each municipality; IDOR administers it for municipalities under 500,000 |
| Chicago municipal telecom tax | Administered by the city under separate authority; rate set by the Chicago Department of Finance |
| 911 surcharge (outside Chicago) | $1.50 per network connection, per month, on wireline, postpaid wireless, and interconnected VoIP |
| Chicago 911 surcharge | City-administered; state law caps it at $5.00 per network connection, per month, through December 31, 2028 |
| Prepaid wireless E911 surcharge | 3% of the sale at the point of sale outside Chicago; 9% in Chicago, effective November 1, 2024 |
| Internet access | Exempt under the federal Internet Tax Freedom Act |
How Illinois Taxes Telecom Services
The Telecommunications Excise Tax Act (35 ILCS 630) imposes the state tax on gross charges for telecommunications. It reaches intrastate messages and interstate messages that originate or terminate in Illinois and are billed to an Illinois service address. Effective July 1, 2025, the rate rose from 7% to 8.65%, with the 1.65 point increase designated to support the 988 Suicide and Crisis Lifeline. Illinois is one of the few states that funds 988 through a percentage of the telecom bill rather than a flat per-line fee.
The municipal layer runs through the Simplified Municipal Telecommunications Tax Act. Each municipality sets its own rate, in quarter-point increments, up to 6%. IDOR collects the tax for municipalities under 500,000 and publishes rate changes twice a year, so the municipal rate on a given invoice depends on which city the service address sits in and when the city last moved its rate.
Chicago is the exception on both layers. As the state's only municipality over 500,000, it administers its own municipal telecom tax and its own 911 surcharges directly, with its own filing and its own rules.
911 And Other Per-Line Fees
Outside Chicago, Illinois imposes a statewide 911 surcharge of $1.50 per network connection, per month, under section 20 of the Emergency Telephone System Act. It applies across technologies: wireline, postpaid wireless, and interconnected Voice over Internet Protocol (VoIP) connections all pay the same amount, and the money flows to the Statewide 9-1-1 Fund.
Prepaid wireless pays at the register: 3% of the sale at the point of sale, collected by the seller and administered by IDOR.
Chicago runs both fees itself. State law authorizes a municipality over 500,000 to impose up to $5.00 per network connection, per month, through December 31, 2028, with the cap dropping to $2.50 on January 1, 2029. The city publishes the amount it currently imposes. Chicago's prepaid wireless surcharge is 9% of the sale, effective November 1, 2024, up from zero after a public act restored the city's authority to impose it.
Taxability By Service Type
Per the Illinois Department of Revenue, the Telecommunications Excise Tax applies to:
- Local, toll, and wide area telephone service
- Private line and channel services
- Cellular mobile telecommunications service
- Specialized mobile radio and stationary two-way radio
- Paging and teletypewriter services
Not taxable or exempt:
- Sales for resale
- Sales in interstate commerce (other than interstate messages billed to an Illinois service address)
- Sales to businesses certified in an Illinois enterprise zone
- Internet access, under the federal Internet Tax Freedom Act; Digital Subscriber Line (DSL) service purchased by a provider of internet access to provide internet access has been exempt since July 1, 2008
How CereTax Handles Illinois
Illinois hides its complexity in the municipal layer and the Chicago carve-out. The state excise just changed, hundreds of municipalities each set their own rate on their own schedule, and Chicago follows different rules for both its telecom tax and its 911 fees. CereTax assigns each service address to the right municipality at the rooftop level, applies the correct state, municipal, and 911 charges by service type, and keeps an audit trail behind every calculation. If you serve customers in Illinois, book a demo and bring a real invoice.
Sources
- Illinois Department of Revenue, Telecommunications Excise Tax (35 ILCS 630). Accessed August 25, 2026.
- Illinois Department of Revenue, Informational Bulletin FY 2025-26, Telecommunications Excise Tax Rate Change, Effective July 1, 2025. Accessed August 25, 2026.
- Illinois Department of Revenue, Simplified Municipal Telecommunications Tax. Accessed August 25, 2026.
- Illinois Department of Revenue, Informational Bulletin FY 2025-05, Prepaid Wireless E911 Surcharge Rate Change, Effective November 1, 2024. Accessed August 25, 2026.
- Illinois State Police, Statewide 911 Division. Accessed August 25, 2026.
- Section 20, Emergency Telephone System Act, 50 ILCS 750/20. Accessed August 25, 2026.
- Section 15.3, Emergency Telephone System Act, 50 ILCS 750/15.3. Accessed August 25, 2026.
- Internet Tax Freedom Act, 47 U.S.C. § 151 note.
See how other states compare on the full telecom tax by state table.
