Sales tax in Illinois for med spas
Illinois does not tax services: its Retailers’ Occupation Tax applies to retail goods at 6.25% state plus local, and the Service Occupation Tax to goods transferred during a service. IDOR says “the service component of a sale of service remains nontaxable,” so a neurotoxin, filler, laser or facial appointment carries no tax on the patient’s bill.
The product is taxed on your side of the counter. A practice whose annual cost of transferred products is under 35% of service receipts (75% for prescription drugs) is “de minimis” and pays use tax on its cost, normally to the supplier at purchase: the 1% state rate on prescription medicines such as neurotoxins, 6.25% plus local on everything else. Do not hand your toxin distributor a resale certificate. Above the threshold you owe Service Occupation Tax on the product’s selling price instead.
Retail is taxed at the full general-merchandise rate: serums, moisturizers and sunscreen are “grooming and hygiene products” even with medicinal claims, unless prescription-only. In Chicago that rate has been 10.50% since the regional transit tax rose 0.25% on August 1, 2026; suburbs are lower.
Chicago example: a $600 neurotoxin treatment and a $120 serum on one ticket. Only the serum is taxed: $120 × 10.50% = $12.60, total $732.60, and the practice paid $5.50 of use tax on the $550 vial at purchase. Register through MyTax Illinois (Form REG-1), no fee; Form ST-1 is due the 20th at the frequency assigned. More in our med spa sales tax guide.
Who can own a med spa in Illinois (CPOM and supervision, summarized)
The Illinois Supreme Court reaffirmed the state’s corporate-practice-of-medicine doctrine in Berlin v. Sarah Bush Lincoln Health Center (1997), excepting only licensed hospitals. This is a summary, not legal advice.
The controlling guidance is the IDFPR and IDPH med spa memo, updated October 30, 2025: med spas must be owned and operated by physicians, or by APRNs within their scope, and “a person who is not a physician or an APRN cannot be a shareholder or member, officer, director, or manager.” Physicians may use the Medical Corporation Act (IDFPR registration, $50, physician-only ownership), the Professional Service Corporation Act or the Professional LLC Act; APRNs the last two. One entity, one profession: medicine and esthetics cannot share a company.
RN injectors, estheticians and investors use the MSO model: their ordinary LLC supplies space, equipment, staff and marketing under a management services agreement. AmSpa’s Illinois CPOM article warns that regulators follow ownership and the money, so an Illinois health-care attorney sets the fee and we book it as written.
The memo also says physicians may delegate to licensed staff, and to trained unlicensed staff when a licensed professional is on site. A physician must examine the patient before laser work; ablative procedures need a physician on site, non-ablative a physician reachable by phone, and since 2025 non-ablative laser hair removal may follow an APRN exam under a written protocol. Estheticians may not affect the living layers of skin (neurotoxin, microneedling, deeper peels). Confirm with a health-care attorney licensed in Illinois.
State business taxes for an Illinois med spa entity
Illinois taxes the entity even when it is a pass-through. The Personal Property Replacement Tax is 1.5% of Illinois net income for S corporations and partnerships, including LLCs taxed as either, and 2.5% for C corporations, which also pay the 7% corporate income tax, 9.5% in all. Owners then pay the flat 4.95% individual rate on their K-1 share. In an MSO structure both entities file; the management fee decides where the 1.5% lands.
The pass-through entity tax election lets an S corporation or partnership pay 4.95% of its net income at the entity level, with a matching credit on the owners’ Illinois returns, for tax years ending on or after December 31, 2021. The entity deducts it federally, which matters once an owner’s state taxes exceed the federal SALT cap, so we model it every fall. An electing entity expecting more than $500 of tax makes estimated payments on the 15th of the fourth, sixth, ninth and twelfth months. Forms IL-1120-ST and IL-1065 are due the 15th day of the third month after year-end, March 15 for calendar-year practices.
Payroll in Illinois for injectors and front desk
Illinois withholds income tax at the flat 4.95% rate, reported on Form IL-941. Unemployment insurance runs through IDES: liability starts at $1,500 of wages in a calendar quarter or an employee in 20 weeks of a year. For 2026 the new-employer rate is 3.350% on a $14,250 taxable wage base, so a full-time injector costs $477.38 a year; experience-rated employers pay 0.750% to 7.050%.
Illinois has no disability or family-leave payroll tax and no local payroll income tax, but the Paid Leave for All Workers Act gives every employee one hour of paid leave per 40 hours worked, up to 40 hours a year, for any reason; Chicago and Cook County apply their own ordinances instead. The state minimum wage is $15.00 ($9.00 tipped), and Chicago sets a higher one. At five or more employees you must offer a retirement plan or facilitate Illinois Secure Choice.
Injectors are W-2 under the IRS common-law test: the practice controls schedule, protocols, products and prices. Paying an RN on a 1099 to skip $477 of unemployment tax is the cheapest-looking mistake in Illinois payroll. See how we structure injector pay.
Registrations, filings and deadlines checklist for an Illinois med spa
Figures checked in October 2026; licensing rows summarize, not advise.
| Item | Where | Fee / due date | Source |
|---|---|---|---|
| Form the entities (MSO LLC; physician- or APRN-owned professional entity) | Illinois Secretary of State | LLC articles $150; annual report $75 before the anniversary month; $100 late | 805 ILCS 180/50-10 |
| Medical corporation certificate of registration | IDFPR online portal | $50; every owner and officer a licensed physician | Medical Corporation Act §§5, 13 |
| Sales, SOT and withholding accounts | MyTax Illinois, Form REG-1 | No fee; one to two business days | IDOR |
| Form ST-1 sales and use tax return | MyTax Illinois | Due the 20th; discount capped at $1,000 a month | IDOR Pub 113 |
| Unemployment insurance account | IDES via MyTax Illinois | $1,500 of quarterly wages or 20 weeks; 3.350% on first $14,250 (2026) | IDES EA-50 |
| Entity return, each entity | IDOR, IL-1120-ST or IL-1065 | 15th day of the third month; 1.5% replacement tax; optional 4.95% PTE tax | IDOR |
| Med spa facility license | IDFPR / IDPH | None; med spas are health-care facilities for infection control | IDFPR med spa memo |
Chicago adds its Personal Property Lease Transaction Tax to equipment leased for use in the city. The federal side is in our opening checklist.
How we work with Illinois med spas from Tampa
Onboarding is remote: a 20-minute fit call, then read-only access to your bank, processor and POS. We pull exports from Boulevard, Zenoti, Aesthetic Record, Vagaro, Mindbody, Nextech or PatientNow into QuickBooks Online, split revenue by service line and retail, track the Service Occupation Tax cost ratio, and close by the tenth business day. Tampa is one hour ahead of Chicago, so our day overlaps yours.
We file ST-1 returns, IL-941 withholding, IDES wage reports, the IL-1120-ST or IL-1065 and federal returns for both entities in an MSO structure. You keep the local pieces: the Illinois health-care attorney, IDFPR registrations, the Chicago or Cook County leave ordinance for your address, and signing what we prepare. Monthly engagements start at $1,500; see pricing, the med spa service page or request a fit call.
An Illinois example
Illustrative only: a single-location Chicago practice — a physician-owned medical corporation plus an RN-owned MSO — with $1,500,000 of combined revenue and five employees.
- Sales and use tax. Retail skincare is $120,000, taxed at Chicago’s 10.50%: $12,600 collected. Treatments of $1,380,000 carry no tax on the ticket. The practice paid the 1% state use tax on $150,000 of neurotoxin purchases, $1,500, plus the Cook County transit share; transferred-product cost of $240,000 is 17% of service receipts, under the 35% line.
- Replacement tax. The MSO, an LLC taxed as an S corporation, nets $200,000: 1.5% is $3,000. The medical corporation, an S corporation too, nets $60,000: $900. If the MSO elects PTE tax it pays 4.95% × $200,000 = $9,900, credited on the owner’s IL-1040.
- Unemployment tax. The first injector, paid $85,000, costs 3.350% × $14,250 = $477.38 of Illinois unemployment tax plus $42 of federal FUTA. All five employees: $2,386.88.