Illinois state taxes

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Illinois

By Bankrate.com

Illinois' income tax is imposed on every individual, corporation, trust and estate earning or receiving income in the state. The tax is a flat 3 percent of a taxpayer's federal adjusted gross income. More on Illinois taxes can be found in the tabbed pages below.

Income

Sales

Property

Estate

Other

Personal income tax
	Illinois taxpayers calculate their state liability by multiplying their income by a flat rate, currently 3 percent.
	Many Illinois taxpayers may be able to electronically file their state returns by using IL-1040 Web File.
	Residents who cannot use the e-file system or who prefer paper forms can download them from the Illinois Revenue Web site.

Sales tax
	Illinois' sales tax rate for general merchandise is 6.25 percent.
	A reduced rate of 1 percent applies to qualifying food, drugs and medical appliances.
	Illinois allows several exemptions from tax. Publication 104, Common Sales Tax Exemptions, lists them. For a complete list of exempt transactions, see Illinois Administrative Code Section 130.120.
	Effective each January and July, the local government sales tax rates may be adjusted. The latest revised local rates can be found in the Illinois Sales Tax Rate Reference Manual.

Personal and real property taxes
	Only real property (real estate) is taxed in Illinois. The revenue it produces is a major source of income for over 6,900 taxing districts.
	The property tax is a local -- not state -- tax, imposed by local government taxing districts which include counties, townships, municipalities, school districts and special taxing districts.
	Generally, the property tax cycle is a two-year cycle. During the first year of the tax cycle, the property is assessed reflecting the property value as of Jan. 1 of that year. During the second year, the actual tax bills for the prior assessment year are calculated and payments collected from property owners (e.g., the tax for the 2008 assessment is paid in 2009).
	Most property in Illinois is assessed at 33.33 percent of its market value, except for farmland. Farmland is not assessed on its market value, but on its ability to produce income. Contact the tax assessor's office for exemptions and tax rates.
	Counties with a population of more than 200,000 may classify property for assessment purposes. Only Cook County uses this method; it has 13 classes or property with assessment levels from 16 percent of market value (residential property) to 38 percent of market value (commercial property).
	There are several homestead exemptions available for Illinois homeowners, including: General Homestead Exemption, Senior Citizens Assessment Freeze Homestead Exemption, Senior Citizens Homestead Exemption, Homestead Improvement Exemption, and Disabled Veterans' Exemption.
	In addition, the Senior Citizens Real Estate Tax Deferral Program allows persons 65 years of age and older, who have a total household income of less than $55,000 and meet certain other qualifications, to defer all or part of the real estate taxes and special assessments on their principal residences. The deferral is similar to a loan against the property's market value and a lien is filed on the property in order to ensure repayment of the deferral.
	Effective Oct. 17, 2007, a new law created three new homestead exemptions for Illinois' disabled citizens and qualifying veterans. Contact your chief county assessment office or local assessment office for exemption application information.

Inheritance and estate taxes
	There is no inheritance tax and limited Illinois estate tax related to federal estate tax collection.

Other Illinois tax facts
	Illinois residents who homeschool their children can find detailed information about the state's education expense credit in Publication 119.
	Illinois collects taxes in more than 40 areas. In addition to the usual liquor, gasoline and cigarette taxes, the state taxes such things as aircraft use, food and beverages and watercraft use. You can find details on all of them at the Illinois Revenue Web site.