Illinois has a flat 4.95 percent individual income tax rate. Illinois has a 9.50 percent corporate income tax rate (7 percent plus a 2.5 percent personal property replacement tax), a 6.25 percent state sales tax rate, and an average combined state and local sales tax rate of 8.96 percent. Illinois has a 1.88 percent effective property tax rate on owner-occupied housing value. Illinois has an estate tax. Illinois’s gas tax is 66.4 cents per gallon, and its cigarette excise tax is $2.98 per pack of 20 cigarettes.
Illinois raises tax revenue primarily through property taxes (32.3 percent of total state and local tax revenue), individual income taxes (20.7 percent), and other taxes (20.0 percent). Illinois collects $8,339 in state and local tax collections per capita, carries $10,363 in state and local debt per capita, and has a 54 percent funded ratio of public pension plans. Illinois’s tax system ranks 38th overall on the 2026 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and Illinois is no exception. Use the tabs below to compare Illinois taxes with other states and to see how Illinois raises tax revenue. You can also browse our tax maps, which are compiled from our annual publication, Facts & Figures 2026: How Does Your State Compare?
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
122 min read
Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
2 min read
Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
9 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for nearly a quarter of combined state and local tax collections.
18 min read
Forty-four states levy a corporate income tax, with top rates ranging from a 2 percent flat rate in North Carolina to an 11.5 percent top marginal rate in New Jersey. Four states—Georgia, Nebraska, North Carolina, and Pennsylvania—reduced their corporate income tax rates effective January 1, 2026.
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Property taxes are the primary tool for financing local governments. While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, property taxes are largely rooted in the benefit principle of taxation: the people paying the property tax bills are most often the ones benefiting from the services.
9 min read
Although most states are on solid financial footing following the coronavirus crisis, pension liabilities are a deep-seated problem that long predates the pandemic.
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State taxation of GILTI is unconventional and economically uncompetitive and will become even more so if the federal government adopts a more aggressive approach to taxing GILTI, as outlined in the American Jobs Plan Act.
29 min read
A landmark comparison of corporate tax costs in all 50 states, Location Matters provides a comprehensive calculation of real-world tax burdens, going beyond headline rates to demonstrate how tax codes impact businesses and offering policymakers a road map to improvement.
8 min read
With so many federal changes occurring in such a short amount of time—including some federal provisions changing more than once and a major change to the treatment of UC income occurring in the middle of tax filing season—state legislators have faced the challenge of responding to these changes quickly in order to provide certainty to taxpayers.
24 min read
The legalization and taxation of recreational marijuana remains one of the hottest trends in state taxation.
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New Yorkers faced the highest burden, with 14.1 percent of income in the state going to state and local taxes. Connecticut (12.8 percent) and Hawaii (12.7 percent) followed.
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Our updated 2021 edition of Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
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Here’s each state’s estimated revenue gains or losses in 2020, alongside the state and local aid that would be allocated to each under the American Rescue Plan Act.
8 min read
Congress chose to exempt forgiven Paycheck Protection Program (PPP) loans from federal income taxation. Many states, however, remain on track to tax them by either treating forgiven loans as taxable income, denying the deduction for expenses paid for using forgiven loans, or both.
11 min read
Individual income taxes are a major source of state government revenue, accounting for 37 percent of state tax collections in fiscal year (FY) 2017. Several states had notable individual income tax changes in 2020: Arizona, Arkansas, Massachusetts, Michigan, Minnesota, North Carolina, Ohio, Tennessee, Virginia, and Wisconsin.
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