Sales Tax and Income Tax
Cost Saving Tax Climate For Your Business
Illinois ranks 37th in the latest Tax Foundation's State Business Tax Climate Index, which measures the impact on business of five major elements of the tax system: the percentage of income taken by all taxes, the individual income tax rates, the corporate income taxes, the sales tax rate, and the complexity of the tax system. Illinois has a MORE ATTRACTIVE TAX CLIMATE FOR BUSINESS than neighboring states like Minnesota. In fact, Illinois’s tax rank is BETTER FOR BUSINESS than some southern states as well, including Alabama, Louisiana and Arkansas. Illinois’ individual income tax burden has consistently ranked below the national average.
Tax Foundation Report on State Business Tax Climates.
Personal Income Taxes
Income earned in Illinois or received by Illinois residents is taxed at 4.95 percent. Partnerships and S-Corporations pay a 1.5 percent personal property replacement tax and yearly corporation franchise taxes. Generally, income from an S corporation is passed on to the shareholders. Shareholders must include this income in their federal adjusted gross income (for individuals) or taxable income (for other taxpayers).
- There are no local personal income taxes in Illinois.
- Retirement income is not taxed in Illinois.
Corporate Income Taxes
The corporate tax rate in Illinois is currently a flat 9.5%. A unitary group of corporations file a combined return in Illinois.
- Illinois generally apportions income using a single sales factor formula and adheres to a market-based sourcing approach.
- Corporations with more than 80 percent of their payroll and property outside the United States are NOT included in combined returns.
- Credits and Deductions Under the Inflation Reduction act of 2022
- Interest on Loans to Enterprise Zone businesses are deductible.
Sales and Use Taxes
Retail purchases of tangible personal property are subject to a state sales tax or use tax rate of 6.25 percent.
Which Cities have Sales Tax – and the Local Tax – City tax plus State = Total
|
|
Sales Taxes(retailers' and service occupation taxes) |
Use Taxes(use and service use taxes) |
Automobile Renting Taxes |
Telecommunication Taxes |
|||||
|---|---|---|---|---|---|---|---|---|---|
City |
General Merchandise |
Qualifying Food & Drug |
Vehicle* |
General Merchandise |
Qualifying Food and Drugs |
Vehicle (RUT-25) and RUT-25-LSE |
Automobile Renting Tax (occupation) |
Automobile Renting Tax (use) |
Telecommunication Taxes |
|
LaSalle |
7.500% |
1.000% |
6.250% |
6.250% |
1.000% |
6.250% |
6.000% |
5.000% |
13.000% |
|
Peru |
7.500% |
1.000% |
6.250% |
6.250% |
1.000% |
6.250% |
5.000% |
5.000% |
11.000% |
|
Streator |
7.500%* |
1.000% |
6.250% |
6.250% |
1.000% |
6.250% |
6.000% |
5.000% |
13.000% |
|
Ottawa |
7.00% |
1.000% |
6.250% |
6.250% |
1.000% |
6.250% |
5.000% |
5.000% |
12.000% |
|
Princeton |
8.000% |
1.000% |
6.250% |
6.250% |
1.000% |
6.250% |
5.000% |
5.000% |
13.000% |
|
Mendota |
6.500% |
1.000% |
6.250% |
6.250% |
1.000% |
6.250% |
6.000% |
5.000% |
13.000% |
|
Oglesby |
7.000% |
1.000% |
6.250% |
6.250% |
1.000% |
6.250% |
5.000% |
5.000% |
13.000% |
|
North Utica |
7.000% |
1.000% |
6.250% |
6.250% |
1.000% |
6.250% |
5.000% |
5.000% |
12.000% |
|
Spring Valley |
7.750% |
1.000% |
6.250% |
6.250% |
1.000% |
6.250% |
6.000% |
5.000% |
9.000% |
|
Ladd |
7.250% |
1.000% |
6.250% |
6.250% |
1.000% |
6.250% |
6.000% |
5.000% |
7.000% |
|
Hennepin |
6.250% |
1.000% |
6.250% |
6.250% |
1.000% |
6.250% |
5.000% |
5.000% |
7.000% |
Sales Tax |
|||
City |
General Merchandise |
Qualifying Food & Drug |
Vehicle* |
| LaSalle | 7.500% | 1.000% | 6.250% |
| Peru | 7.500% | 1.000% | 6.250% |
| Streator | 7.500% * | 1.000% | 6.250% |
| Ottawa | 7.000% | 1.000% | 6.250% |
| Princeton | 8.000% | 1.000% | 6.250% |
| Mendota | 6.500% | 1.000% | 6.250% |
| Oglesby | 7.000% | 1.000% | 6.250% |
| North Utica | 7.000% | 1.000% | 6.250% |
| Spring Valley | 7.750% | 1.000% | 6.250% |
| Ladd | 7.250% | 1.000% | 6.250% |
| Hennepin | 6.250% | 1.000% | 6.250% |
Use Tax |
|||
City |
General Merchandise |
Qualifying Food & Drug |
Vehicle* |
| LaSalle | 6.250% | 1.000% | 6.250% |
| Peru | 6.250% | 1.000% | 6.250% |
| Streator | 6.250% | 1.000% | 6.250% |
| Ottawa | 6.250% | 1.000% | 6.250% |
| Princeton | 6.250% | 1.000% | 6.250% |
| Mendota | 6.250% | 1.000% | 6.250% |
| Oglesby | 6.250% | 1.000% | 6.250% |
| North Utica | 6.250% | 1.000% | 6.250% |
| Spring Valley | 6.250% | 1.000% | 6.250% |
| Ladd | 6.250% | 1.000% | 6.250% |
| Hennepin | 6.250% | 1.000% | 6.250% |
Automobile Renting Taxes |
||
City |
Automobile Renting Tax (occupation) |
Automobile Renting Tax (use) |
| LaSalle | 6.000% | 5.000% |
| Peru | 5.000% | 5.000% |
| Streator | 6.000% | 5.000% |
| Ottawa | 5.000% | 5.000% |
| Princeton | 5.000% | 5.000% |
| Mendota | 6.000% | 5.000% |
| Oglesby | 5.000% | 5.000% |
| North Utica | 5.000% | 5.000% |
| Spring Valley | 6.000% | 5.000% |
| Ladd | 6.000% | 5.000% |
| Hennepin | 5.000% | 5.000% |
Telecommunication Taxes |
|
City |
Rate |
| LaSalle | 13.000% |
| Peru | 11.000% |
| Streator | 13.000% |
| Ottawa | 12.000% |
| Princeton | 13.000% |
| Mendota | 13.000% |
| Oglesby | 13.000% |
| North Utica | 12.000% |
| Spring Valley | 9.000% |
| Ladd | 7.000% |
| Hennepin | 7.000% |
*If the vehicle or trailer is titled and registered to an out-of-state location, you (the dealer) may be required to collect tax. Refer to ST-58, Reciprocal - Non-Reciprocal Vehicle Tax Rate Chart.
Local sales tax rates vary.
- Sales & use tax information can be found here. Business incentives and building materials exemption may be found here.
- Food, drugs, and medical appliances are taxed at the reduced rate of one percent.
Illinois Motor Fuel Tax Rates and Fees |