State Tax in Illinois

The state tax in Illinois is determined based on the area you are living or shopping.  Illinois tax law allows different cities and counties to set certain tax rates in addition to the standard sales tax.  A few items are excluded from this additional tax making it important to know the different local taxes before going on any type of spending spree within the state.

Sales Tax in Illinois

The different levels of sales tax are usually the item of greatest concern to most people.  It is difficult to make responsible spending decisions if you are not sure what you will be expected to pay for taxes.  The standard sales tax in Illinois is 6.25 per cent on most items but local governments have the option of raising this tax to 8.5 per cent.

If you are facing a tax audit, or other tax law issues, consult with a tax attorney in your area to discuss your options.

There are certain items in Illinois that have a tax rate that is completely regulated by the state government.  These items include certain basic supplies, fuel, and cigarettes.  The taxes on certain food items, medical appliances, and all medications are only one per cent.  This gives individuals the chance to save money while not depriving the state of a source of revenue.  The taxes on fuel are between 40.6 cents and 41.3 cents depending on whether you use gasoline or diesel.  The tax on cigarettes is one of the highest at 98 cents per pack in some areas but between $2.98 and $3.66 in many cities and counties.

Income Tax Rates

While the sales tax rates in Illinois might fluctuate dependent upon where you are, the state income tax is steadier.  Instead of taking tax brackets into account, state tax laws in Illinois set at a flat rate of three per cent on adjusted gross income.  This might seem unfair to some people who believe that lower income families should be taxed less but as of now the state government has no plans to change this rate.  The Illinois state government does not tax retirement income in any way and this includes self-employee retirement plans, IRA accounts, and 401(k) accounts.

Property Tax Rates

The property taxes are also controlled by the different counties, townships, and municipalities of Illinois.  Most areas assess property value at 33.33 per cent of the market value.  Only farms are assessed differently based on their ability to produce an income.  This rate does vary and can be lower depending upon what area you live in.  The state does offer different types of homestead exemption programs which are based upon different factors such as age, disability, income, and whether or not your home is a primary residence.

If you are facing a tax audit, or other tax law issues, consult with a tax attorney in your area to discuss your options.
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