Grocery and convenience stores
Accounting for Chicago Grocery and Convenience Stores
Two sales tax rates, lottery, tobacco stamps
What this business files
Form numbers and dates. A deadline landing on a weekend moves to the following Monday.
- Form ST-1Sales tax, reported separately for food and for general merchandiseMonthly, by the 20th
- Form 941 and IL-941Payroll tax and Illinois withholding on staff wagesQuarterly
- Form 8300Report of a cash payment over $10,000 from one buyerWithin 15 days of the payment
- Schedule C or Form 1120-SThe business return for the storeApril 15, or March 15 for an S corporation
Where owners lose money
We watch for these on every file in this trade.
- Illinois ended the 1% state grocery tax on 1 January 2026, and municipalities are allowed to adopt their own in its place. The rate on food now depends on where the store sits.
- Lottery is commission income, not a sale. Running the full ticket value through revenue inflates sales and the tax base with it.
- Cigarette and tobacco stamps are a purchased asset before they are a cost, and stores routinely expense them on the wrong date.
- Owner withdrawals taken from the till rather than the bank are the single most common reason a store cannot produce statements for a lender.
Services this trade uses
One fixed monthly fee, agreed before the first month. Catch-up on prior periods is quoted once.
Grocery or corner store
Common questions
What sales tax rate applies to food in my store?
Illinois ended the 1% state grocery tax on 1 January 2026 and allowed municipalities to impose their own 1% tax on the same goods. Whether food in your store is taxed now depends on the municipality. Candy, soft drinks and prepared food have always been taxed at the general merchandise rate rather than the food rate.
How should lottery sales appear in the books?
Ticket sales are money held on behalf of the state, and only the commission is your income. Recording gross ticket value as revenue overstates sales, distorts every margin figure and creates a sales tax question you should never have to answer.
The Department of Revenue sent a notice about my ST-1. What now?
Send it to us. Most store notices come from a mismatch between reported sales and third-party data, and most resolve with a reconciliation showing where the difference sits. We answer the notice, and we fix whatever produced it so the next one does not arrive.
Can I pay staff in cash?
You are allowed to pay wages in cash, and you still owe the same withholding, the same quarterly returns and the same W-2 at year end. Paying cash without running payroll is what turns a small audit into an assessment with penalties.
Get your price this week
The first conversation is free. We read three months of statements, quote a flat figure and hold it. We reply the same working day.