The Tax Foundation

Tax Data

Illinois

The Facts on Illinois’ Tax Climate

Here are some basic facts on Illinois’ tax system and how it compares to other states:

Tax Freedom Day Arrives on April 23 in Illinois
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2008, Illinois taxpayers had to work until April 23 to pay their total tax bill, ranking the state 16th nationally. Illinois' Tax Freedom Day falls on the same day as national Tax Freedom Day. The Tax Freedom Days of neighboring states are: Wisconsin, April 24 (ranked 14th nationally); Iowa, April 16 (ranked 34th nationally); Missouri, April 14 (ranked 36th nationally); Kentucky, April 10 (ranked 45th nationally); and Indiana, April 17 (ranked 29th nationally).

Tax Freedom Day has been projected using the most up-to-date economic and budget projections from official government agencies. However, Tax Foundation estimates of average state and local tax rates for 2008 will not be released until later this spring as we await more up-to-date data from various government agencies.
Full study of Tax Freedom Day, nationwide and in each state

Illinois' State/Local Tax Burden Below National Average
Estimated at 9.3% of income, Illinois' state/local tax burden ranks 30th highest nationally, below the national average of 9.7%. Illinois taxpayers pay $4,346 per capita in state and local taxes.
llinois' State-Local Tax Burden, 1977-present
Other States' State/Local Tax Burdens
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2008 

Illinois' 2008 Business Tax Climate Ranks 25th
Illinois ranks 28th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: Wisconsin (39th), Iowa (45th), Missouri (15th), Kentucky (36th) and Indiana (12th).
50-State Comparison of Business Tax Climates (data only)
2008 State Business Tax Climate Index, Fifth Edition (full study)

Illinois' Individual Income Tax System
Illinois' personal income tax system consists of a flat 3% rate on federal adjusted gross income. That rate is the lowest among states that levy individual income taxes. Illinois' 2005 individual income tax collections were $622 per person, which ranked 35th highest nationally.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita

Illinois' Corporate Income Tax System
Illinois' corporate tax structure consists of a flat rate of 7.3% on all corporate income. Among states levying corporate income taxes, Illinois' rate ranks 24th highest. In 2006, state-level corporate tax collections (excluding local taxes) were $187.05 per capita, which ranks 13th highest nationally.
50-State Table of Corporate Income Tax Rates, 2000-2008
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household, 2005
50-State Table of State Corporate Income Tax Collections Per Capita, 2006

Illinois Levies Sales Tax above National Median
Illinois levies a 6.25% general sales or use tax on consumers, which is above the national median of 5.4%. State and local governments combined collected $1,312 per capita in 2005 in general sales taxes, which ranks 18th nationally. Illinois' gasoline tax stands at 39.5 cents per gallon, which ranks 4th highest nationally. Additionally, the state's general sales tax is applied to gasoline purchases. The cigarette tax stands at 98 cents per pack of twenty and ranks 27th nationally. The sales tax was adopted in 1933, the gasoline tax in 1927 and the cigarette tax in 1941.
50-State Table of Sales and Excise Tax Rates
50-State Table of State and Local General Sales and Gross Receipts Tax Collections Per Household and Per Capita, Fiscal Year 2005

Illinois Property Taxes: Comparatively High
Illinois is one of the 37 states that collect property taxes at both the state and local levels. As in most states, local governments collect far more. Illinois' localities collected $17,831,744,000 in property taxes in fiscal year 2004, which is the latest year for which the Census Bureau has published state-by-state data. At the state level, Illinois collected $57,084,000 in property taxes during FY 2004. Combined state/local property taxes were $17,888,828,000 in 2004, which brings per capita collections to $1,407 (ranking 9th highest nationally).
State property tax collections per capita by state

Federal Tax Burdens and Expenditures: Illinois is a Donor State
Illinois taxpayers receive less federal funding per dollar of federal taxes paid compared to the average state. In 2005, Illinois citizens received approximately $0.75 in the way of federal spending per dollar of federal taxes paid. This ranks the state 45th nationally and represents a slight rise from 1995, when Illinois received $0.74 per dollar of taxes in federal spending and ranked 47th nationally. Neighboring states and the amount of federal spending they received per dollar of federal taxation paid were as follows: Wisconsin ($0.86), Iowa ($1.10), Missouri ($1.32), Kentucky ($1.51) and Indiana ($1.05).
Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state

Tax Data from The Tax Foundation