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 15 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 2011, Illinois taxpayers work until April 15 to pay their total tax bill, ranking the state 9th nationally, three days after national Tax Freedom Day. The Tax Freedom Days of neighboring states are: Wisconsin, April 16 (ranked 7th nationally); Iowa, April 6 (ranked 29th nationally); Missouri, April 4 (ranked 33rd nationally); Kentucky, April 2 (ranked 42nd nationally); and Indiana, April 5 (ranked 32nd nationally).
Full study of Tax Freedom Day, nationwide and in each state

Illinois' State and Local Tax Burden Above National Average
Illinois' 2009 state and local tax burden of 10.0% of income is above the national average of 9.8%. Illinois' tax burden has decreased overall from 10.4% (16th nationally) in 1977 to 10.0% (13th nationally) in 2009. Illinois taxpayers pay $4,596 per capita in state and local taxes.
Illinois' State-Local Tax Burden, 1977-present
Other States' State/Local Tax Burdens
Map of U.S. Showing all State's Burdens and Ranks
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2009

Illinois' 2012 Business Tax Climate Ranks 28th
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 rank as follows: Wisconsin (43rd), Iowa (41st), Missouri (15th), Kentucky (22nd) and Indiana (11th).
50-State Comparison of Business Tax Climates (data only)
2012 State Business Tax Climate Index, Ninth Edition (full study)

Illinois' Individual Income Tax System
Illinois' personal income tax system consists of a flat 5% rate on federal adjusted gross income (an increase from 3% last year). That rate is among the lowest among states that levy individual income taxes. Illinois' 2008 state-level individual income tax collections were $806 per person, which ranked 31st 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 9.5% on all corporate income (consisting of two taxes on corporate income at rates of 7.0% and 2.5%). Among states levying corporate income taxes, Illinois' rate ranks among the highest. In 2008, state-level corporate tax collections (excluding local taxes) were $243 per capita, which ranks 10th highest nationally.
50-State Table of Corporate Income Tax Rates
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household
50-State Table of State Corporate Income Tax Collections Per Capita

Illinois Sales and Excise Taxes
Illinois levies a 6.25% general sales or use tax on consumers, which is above the national median of 5.85%. In 2007 combined state and local general and selective sales tax collections were $1,458 per person, which ranks 16th nationally. Illinois' gasoline tax stands at 39 cents per gallon, which ranks 6th 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 29th nationally. The sales tax was adopted in 1933, the gasoline tax in 1927 and the cigarette tax in 1941.
50-state table of sales, cigarette, gas, beer, wine, and spirits tax rates.
50-State Table of State and Local General and Selective Sales Tax Collections Per Capita

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 $1,528.87 per capita in property taxes in fiscal year 2006, which is the latest year for which the Census Bureau has published state-by-state data. At the state level, Illinois collected $5.07 during FY 2006. Combined state/local property taxes were $1,533.94, which rank10th 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

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