The 2017 Illinois State Sales Tax
What is the 2017 Illinois Sales Tax Rate?
The Illinois state sales tax rate is 6.25%, and the average IL sales tax after local surtaxes is 8.19%.
Illinois has one of the most complicated sales tax codes in the country. There are four major divisions of the Illinois sales tax - Retailers' Occupation Tax, Use Tax, Service Occupation Tax and the Service Use Tax.
The Retailers' Occupation Tax and Use Tax are charged to the business and the customer respectively, and make up the main "sales tax" in Illinois. The Service Occupation Tax and the Service Use Tax apply to any tangible property exchanged in a service transaction (such as paint used by a painter on his client's house), but not directly on the service itself.
Newspapers, magazines, and any legal tender (like gold) are completely exempt from the sales tax. Certain items like food and drugs are subject to a special state sales tax of 1%, plus any local sales taxes.
Localities in Illinois are allowed to collect a local option sales tax. With the compounding of different special business district taxes, purchases in certain areas like Cook County may be subject to a sales tax of up to 11.50%. Chicago's base sales tax is 9.5%, the highest of any major U.S. city.
As of 2011, Illinois has become one of the only states to require that sales tax be paid for purchases made online, even from retailers with no physical presence in Illinois.
If you are a Illinois business owner, you can learn more about how to collect and file your Illinois sales tax return at the 2017 Illinois Sales Tax Handbook .
Illinois Sales Tax Exemptions
Illinois does not exempt any types of purchase from the state sales tax. Non-prescription Drugs, prescription drugs, prepared food and groceries are subject to special sales tax rates under Illinois law. In most states, necessities such as groceries, clothes, and drugs are exempted from the sales tax or charged at a lower sales tax rate.
Some items may not be eligible for these reduced sales tax rates, such as expensive clothing, unhealthy food or drinks like soda, and certain non-essential pharmaceuticals. Illinois does not treat candy or soda as groceries, which means they are not subject to reduced grocery sales tax rates. Other items including gasoline, alcohol, and cigarettes are subject to various Illinois excise taxes in addition to the sales tax.
In some states, items like alcohol and prepared food (including restaurant meals and some premade supermarket items) are charged at a higher sales tax rate. Prepared Food is subject to a higher state sales tax then other items. The IL sales tax applicable to the sale of cars, boats, and real estate sales may also vary by jurisdiction. Illinois's sales tax rates for commonly exempted items are as follows:
$100 Restaurant Dinner
$100 of groceries
$100 in clothes
$100 of consumer products
$8.25 sales tax
$1.00 sales tax
$6.25 sales tax
$6.25 sales tax
Illinois Sales Tax Exemption Certificate
Unlike a Value Added Tax (VAT), the Illinois sales tax only applies to end consumers of the product. Individuals and companies who are purchasing goods for resale, improvement, or as raw materials can use a Illinois Sales Tax Exemption Form to buy these goods tax-free.
Companies or individuals who wish to make a qualifying purchase tax-free must have a Illinois state sales tax exemption certificate, which can be obtained from the Illinois Department of Revenue . On making an exempt purchase, Exemption Certificate holders may submit a completed Illinois Sales Tax Exemption Form to the vendor instead of paying sales tax.
Sales tax exemption forms (as well as business sales tax id applications, sales tax returns, and the full Illinois sales tax code) can be downloaded from the Illinois Department of Revenue here .
Illinois Sales Tax Calculator
Whenever you make a purchase at a licensed Illinois retailer, your sales tax will be automatically calculated and added to your bill. To lookup the sales tax due on any purchase, use our Illinois sales tax calculator.
Illinois Use Tax
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If you buy goods and are not charged the Illinois Sales Tax by the retailer, such as with online and out-of-state purchases, you are supposed to pay the 6.25% sales tax (less any foreign sales tax paid) for these items yourself as the Illinois Use Tax.
Your are expected to voluntarily list your liable purchases on a Illinois Use Tax Return, which should be attached with payment to your Illinois Income Tax Return. Historically, compliance rates with with the Illinois Use Tax have been low.
Illinois Local Sales Taxes
Illinois does not allow local jurisdictions like cities or counties to collect a local sales tax. The Illinois state sales tax of 6.25% is applicable statewide. You can view the sales tax rates for various cities in Illinois here.
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