A cap on the retailers’ sales tax credit will effectively hikes taxes on Illinois retailers by $186 million. Retailers are already facing razor-thin margins, but the record $53.1 billion state budget required $1.1 billion in new taxes.
Illinois shoppers will pay an average 8.81% in sales taxes on presents this holiday, the eighth most nationwide. Some Cook County communities will charge up to 11.5%.
Retailers should expect a record number of holiday shoppers this weekend. Shoppers in Illinois will get hit with some of the nation’s highest sales taxes.
Surging gasoline prices mean Illinois is getting a boost in sales taxes from fuel, but that’s because drivers are paying the extra $200 a year. Most states don’t charge sales tax on gasoline, but Illinois adds it atop other taxes – taxing the taxes.
Illinois’ combined state and average local retail sales tax rate topped 8.8% in 2022. That’s the 8th-highest in the nation and the highest in the Midwest.
Sales tax revenue is up from pre-pandemic levels, in part because Illinois is now forcing online retailers to charge local sales tax rates as high as 10.25%. No tax breaks this Cyber Monday.
Illinoisans pay one of the highest sales tax rates in the nation when local and state sales taxes are averaged. The average rate of 8.83% was up slightly from a year earlier.
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