Illinois Combined State And Local Sales Tax Highest Among Neighbors 8th In Country
Combined state and local sales taxes in Illinois rank among the highest in the country, according to new research by the Tax Foundation.
The report looked at a population-weighted average of local taxes in addition to the statewide rate of 6.25%. Illinois combined rate of 8.81% ranked 8th in the country.
Its primarily due to the local rates, said Katherine Loughead, senior policy analyst with the Tax Foundation. If you look at the state rate alone, its still above average, but its not quite as high. Illinois state rate of 6.25% is the 13th highest.
No state sales tax rates have changed in the U.S. since Utah increased its rate in 2019. That means most of the movement on the list comes from local municipalities making adjustments.
The really high rate in Chicago of 10.25%, thats weighted heavily, Loughead said. Some of the less densely-populated areas of the state are the ones that have slightly lower rates across the board.
Illinois combined rate is also higher than all neighboring states, which could lead shoppers to slip across the border for purchases.
Wisconsin has one of the lowest sales tax rates in the country, Loughead said. Indiana, Iowa, Missouri, and Kentucky all have lower combined rates as well. Really anywhere along those borders, theres a pretty strong incentive to shop across state lines.
How To Collect Sales Tax In Illinois
Now itâs time to tackle the intricate stuff! Tax rates can vary based on the location of your business and the location of your customer, plus the levels of sales tax that apply in those specific locations.
The state-wide sales tax in Illinois is 6.25%.
There are additional levels of sales tax at local jurisdictions, too.
Check out Quaderno’s Sales Tax Calculator see your product’s tax rate, amount, and final price in Illinois.
Illinois has an origin-based sales tax system, which keeps it simple for you. If youâre a local business, then you must charge the tax rate according to your location in Illinois. So that would be the state-wide 6.25%, plus any local taxes if necessary.
If you have more than one location in Illinois, then charge the sales tax rate of where the sale occurred.
If youâre not based in Illinois but have nexus in the state, you may charge only the 6.25% use tax rate. * Use tax is similar to sales tax, but charged only by âremote sellersâ â businesses like you, who arenât based in a state but have nexus there.
* Important to note for remote sellers: This is not always true. While some states allow out-of-state retailers to charge a flat use tax rate, other states have peculiar rules for remote sellers. Contact the stateâs Department of Revenue to be sure.
Property Taxes & Chicago Schools
One school of thought contends that Chicago property taxes are too high considering students quality of education in public schools.
Although the citys leadership has made vast improvements in education over the past decade, there is still much room for improvement.
In fact, according to a survey conducted by the University of Chicagos Consortium on Chicago School Research, students in public schools are only as likely as students in private schools to successfully apply and be accepted into four-year colleges.
Homeowners who would rather send their children to a private school must pay tuition, averaging $11,000 per year.
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Chicago Ranks No 2 In The Nation For Combined State And Local Sales Tax
The Windy City tied with four other major cities as imposing the nations second highest sales tax on residents among 124 considered. The report warns the citys new status could be costing Chicago businesses their competitive edge.
The city of Chicago ranks No. 2 in the nation among major cities for combined state and local sales tax rates, according to a new report.
The Tax Foundation study indicates these higher sales taxes are driving consumers away from Chicago businesses and into neighboring suburbs.
Chicago tied with four other major cities as imposing the nations second highest sales tax burden on residents as of July 1. Seattle and California cities Fremont, Long Beach and Oakland rounded out the second-place spot.
Tacoma, Wash., claimed No. 1 at 10.30%. Anchorage and Portland tied for the lowest sales tax rate at 0%.
The national study found that sales tax avoidance is most likely to occur in areas with a significantly different sales tax rate than neighboring jurisdictions.
This means major cities with higher sales taxes than surrounding areas are more likely to see an increase in online and cross-border shopping as residents look to avoid paying steep rates.
Given Chicago levies sales taxes on residents more than 25% higher than nearby cities such as Naperville or Wheaton, where rates are 7.75% and 8% respectively, those residents stand to save a lot by shopping elsewhere.
Chicago Office| Illinois Policy300 S. Riverside Plaza | 1650 |Chicago, IL 60606
Chicago Illinois Sales Tax Rate
chicago Tax jurisdiction breakdown for 2022
What does this sales tax rate breakdown mean?
Sales tax rates are determined by exact street address. The jurisdiction-specific rates shown add up to your minimum combined sales tax rate. The total rate for your specific address could be more.
Need the exact sales tax rate for your address?
What is the sales tax rate in Chicago, Illinois?
The minimum combined 2022 sales tax rate for Chicago, Illinois is . This is the total of state, county and city sales tax rates. The Illinois sales tax rate is currently %. The County sales tax rate is %. The Chicago sales tax rate is %.
Did South Dakota v. Wayfair, Inc affect Illinois?
The 2018 United States Supreme Court decision in South Dakota v. Wayfair, Inc. has impacted many state nexus laws and sales tax collection requirements. To review the rules in Illinois, visit our state-by-state guide.
Did COVID-19 impact sales tax filing due dates in Chicago?
The outbreak of COVID-19 may have impacted sales tax filing due dates in Chicago. Please consult your local tax authority for specific details. For more information, visit our ongoing coverage of the virus and its impact on sales tax compliance.
Automating sales tax compliance can help your business keep compliant with changing sales tax laws in Illinois and beyond. AvaTax delivers real-time sales tax rates and uses advanced technology to map rates to exact address locations, based on the latest jurisdiction requirements.
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Additional Resources & Disclaimer
While we make every effort to ensure that our information on the West Chicago sales tax is up to date, we can offer no warranty as to theaccuracy of the data provided. Please let us know if any of our data is incorrect, and we will update our database as soon as possible.
Help us keep our data updated!
If you notice that any of our provided data is incorrect or out of date, please notify us and include links to your data sources . If we can validate the sources you provide, we will include this information in our data.
Data Accuracy Disclaimer
Tax-Rates.org provides sales tax data for West Chicago on an AS-IS basis in the hope that it might be useful, and we can offer NO IMPLIED WARRANTY OF FITNESS. While we attempt to ensure that the data provided is accurate and up to date, we cannot be held liable for errors in data or calculations we provide or any consequence or loss resulting from the of use of the Data or tools provided by Tax-Rates.org.
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Earned Income Tax Credit
The Illinois Earned Income Tax Credit/Earned Income Credit is for working people with low to moderate income to help reduce the amount of tax they owe. The credit is refundable, which means it may result in a refund. You can only claim the Illinois EITC/EIC if you qualify for it on your federal income tax return and itâs worth 18% of your federal EITC/EIC.
You may qualify for the federal EITC/EIC if your adjusted gross income is under $57,414 , you meet basic rules such as having investment income below $10,000 and a valid Social Security number, and you meet the requirements for those without a child or meet all of the qualifying child rules.
Food And Beverage Tax
Food for consumption off property is taxed at 1 percent on sales tax returns. This rule has several exceptions, including:
- Hot food products are dispensed from a vending machine.
- Candy dispensed from a vending machine.
- Soft drinks are dispensed from a vending machine.
- Food for immediate consumption.
- Sandwiches, whether hot or cold.
- Alcoholic beverages.
- Items that contain cannabis, such as cannabis flower, products infused with cannabis, and concentrate.
The exceptions are taxed at the regular state rate of 6.25 percent plus discretionary taxes.
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Which State Has No Sales Tax
Alaska. Known as The Last Frontier, Alaska is the most tax-friendly state in the country. It has no sales tax and no state income tax. Alaska charges a slightly higher than average property tax rate of 1.18%, but the state has several ways to apply for property tax exemptions.
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West Chicago Sales Tax Calculator
All merchants operating in West Chicago must automatically calculate the sales tax due on each purchase made and include it in separately in the receipt. Goods bought for resale or other business use may be exempted from the sales tax. If you purchase goods online or through the mail and do not pay any sales tax, you are expected to pay use tax to the Illinois Department of Revenue . For more details, see the Illinois sales tax.
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How To File Taxes In Illinois
When tax time rolls around in Illinois, whether itâs monthly or annually, you must do three things:
Illinois requires that any seller with a sales tax permit file a sales tax return on your due date, even if you donât have any sales tax to report or pay. Even if you didnât make a single sale in Illinois during the reporting period, you should must do a âzero tax filing.â
Cook County And Chicago Sales Tax
In addition to generating property tax revenue, both the city and county continue to raise the local sales tax on its residents, tourists, and visitors. Based on the consumer price index, Chicago increased its city sales tax by 0.75 percentage points.
This change raised the citys overall sales tax rate to 10.25 percentthe highest in the country for a major city .
Residents living outside of Cook County purchase products and services, such as a wedding reception in a banquet hall in the county and are required to pay the increased sales tax.
Chicago raised its overall sales tax from 9 percent to nearly 10 percent, higher than most other major cities when it increased its sales taxes. For example:
- Houstons sales tax is currently 8.25 percent
- Philadelphias sales tax is currently 8 percent
- Phoenixs sales tax is 9.6 percent
- San Antonios sales tax is currently 8.25 percent
- Dallas sales tax is 8.25 percent
Los Angeles sales tax rate is 10.25 percent, making it the highest property tax rate in the country for a major city, beating out Chicago by 0.25 points. Philadelphia, Houston, San Antonio, Dallas, Phoenix, and LA have sales tax rates under Chicagos current 10.25 percent rate.
The city of Chicago also raised its amusement tax from 1 percent to 6 percent, hoping that it will generate another $12 million in revenue per year to make up for the citys $33 million budget deficit.
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What Is The Tax Holiday
Senate Bill 157 lowers the tax rate on clothes and school supplies by 5% for 10 days in August.
As a nod to our working parents, guardians and teachers in Illinois, lowering the tax rate on school supplies removes a burden when preparing for the academic year, State Sen. Rachelle Crowe said in a statement. It is my hope that by instituting a tax holiday, we can help relieve families and educators of some financial costs in order to prepare students for the upcoming school year.
Illinois Sales Tax Rates By City
The state sales tax rate in Illinois is 6.250%. With local taxes, the total sales tax rate is between 6.250% and 11.000%.
Illinois has recent rate changes .
Select the Illinois city from the list of popular cities below to see its current sales tax rate.
Sales tax data for Illinois was collected from here. Sale-Tax.com strives to have the most accurate tax percentages available but tax rates are subject to change at any time. Always consult your local government tax offices for the latest official city, county, and state tax rates. Help us make this site better by reporting errors.
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Illinois Sales Tax Guide
Illinois has several sales tax rates in addition to the state tax rate of 6.25 percent. The state also has several discretionary taxes for local jurisdictions, including counties, cities, and governmental jurisdictions. A business must add discretionary taxes to the states tax rate to charge the appropriate sales and use tax rates.
This guide does not fully describe all of Illinois laws and regulations regarding taxes. Businesses should contact a business attorney or visit the Illinois Department of Revenue to learn more about the rules, regulations and tax laws associated with their industries and the types of taxes due.
Illinois Alcohol And Tobacco Tax
Illinois applies per-gallon alcohol excise taxes based on the alcohol content of the beverage being sold. Beer will generally be subject to a rate of 23 cents per gallon while liquor is subject to a rate of $8.55 per gallon. The cigarette excise tax in Illinois is $2.98 per pack of 20.
- Illinois is the home state of former U.S. president, Barack Obama.
- Former U.S. president Abraham Lincoln owned and operated a bar in New Salem, Illinois, before entering politics.
- Illinois is the French adaptation of an Algonquin word that means warriors.
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What You Need To Know About Illinois State Taxes
The state of Illinois requires you to pay taxes if youâre a resident or nonresident that receives income from an Illinois source. The state income tax rates are 4.95%, and the sales tax rate is 1% for qualifying food drugs and medical appliances and 6.25% on general merchandise.
The tax rates on this page apply to the 2020 tax season as Illinois hasnât yet released its rates for the 2021 tax season. Weâll update this page when they do.
Illinois state offers a personal exemption and tax credits, such as the earned income tax credit, and education expense credit.
How Income Taxes Are Calculated
When Do We Update? We regularly check for any updates to the latest tax rates and regulations.
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Illinois Sales Tax Holiday Is August 5
The Illinois state sales tax holiday is a 10-day period during which consumers can purchase certain items and pay sales tax at a reduced rate. The effective dates are August 5th through August 14th, 2022. The states portion of sales tax due throughout the holiday is reduced by 5% from 6.25%. The consumers will pay 1.25% state sales tax plus the local sales tax rate during that period. To get the benefits of reduced sales tax, qualifying clothing and footwear should have a retail selling price of less than $125 per item and school supplies used by students in course of study. School supplies are not subject to the $125 threshold.
- Some of the Qualifying items under state sales tax holiday rate
- bathing suits, caps, belts, coats, jackets, gloves, hats, etc.
- Shoes, Sandals, sneakers, socks and stockings, insoles, etc.
- School Supplies
- Binder, book bags, crayons, pencils, calculators
- Computers and computer supplies
- Flash drive, data storage printers, etc.
- Instructional materials
Components of the 10.25% Chicago sales tax
The sales tax rate in Chicago is 10.25%, and consists of 6.25% Illinois state sales tax, 1.75% Cook County sales tax, 1.25% Chicago city tax and 1% special district tax.Chicago is located within Cook County and has a population of approximately 1,964,800, and contains the following 84 ZIP codes: