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.
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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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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
Thirty-nine states will begin 2025 with notable tax changes, including nine states cutting individual income taxes. Recent years have seen a wave of significant tax reforms, and the changes scheduled for 2025 show that these efforts have not let up.
25 min read
Tax avoidance is a natural consequence of tax policy. Policymakers should consider the unintended consequences, both to public health and public coffers, of the excise taxes and regulatory regimes for cigarettes and other nicotine products.
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Consumers legally wagered more than $100 billion on sporting contests in 2023, creating more than $1.8 billion in state revenue. Sports betting is now legal in 38 states and DC, and the landscape is rapidly evolving.
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Recent data suggest that tax competitiveness plays a significant role in residents’ relocation decisions.
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Growing cigarette tax levels and differentials have made cigarette smuggling both a national problem and a lucrative criminal enterprise.
16 min read
Over 500 million premium cigars were sold in the United States in 2023. With each sale comes a complex tax landscape.
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Policymakers can and should address taxpayers’ legitimate grievances about out-of-control property tax bills, but they should do so without upending a system of taxation that is more efficient, fair, and pro-growth, and better suited to municipal finance, than any of the alternatives.
39 min read
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.
115 min read
The long-term value of these projects to the broader public remains highly debatable.
States that tax GILTI increase filing complexity, drive up the cost of tax compliance, and introduce unnecessary economic uncertainty and legal risk. 21 states and DC continue to tax GILTI despite these challenges.
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