Illinois State Tax
Illinois Income Tax
State tax collection is one of the main sources of revenue for the State of Illinois. Taxpayers are subject to three main types of taxes; personal and corporate income tax, property tax, and sales tax.
Illinois is another state that levies flat state income tax rates on its residents. State tax returns are based on adjusted federal income tax returns and deductions applicable in the state. Unlike most states, Illinois does not allow counties and cities to levy additional local income taxes.
Illinois income tax rates belong to the middle range of US income tax rates. The 5% flat rate in Illinois is lower than in 33 other states. Though there are no standard deductions and exemptions in the Illinois state tax system, minimizing the total amount of tax to be paid is possible through certain subtractions, tax credits and tax holidays observed in the state.
Property tax rates in Illinois are the seventh highest in the United States. The average property tax collected from Illinois is 1.73% of a property’s fair market value. However, variations in rates make it possible for some counties to charge up to 2.19% property tax rate yearly.
The base sales tax rate in Illinois is 6.25%. Illinois sales tax has four main categories: the Retailers’ Occupation Tax, Use Tax, Service Occupation Tax and the Service Use Tax. The state also has additional 1% local tax on food and medicine, as well as up to 5.25% county sales tax. Chicago has the highest sales tax rates of all major US cities.