Sales Tax

Sales Tax in Illinois: Complete Guide 2026

Updated 2026-03-10

Data Notice: Figures, rates, and statistics cited in this article are based on the most recent available data at time of writing and may reflect projections or prior-year figures. Always verify current numbers with official sources before making financial, medical, or educational decisions.

Sales Tax in Illinois: Complete Guide 2026

Tax information is for educational purposes only and does not constitute tax advice. Consult a licensed tax professional for your specific situation.

Illinois has one of the most complex sales tax systems in the country, with a 6.25% state rate on general merchandise and a lower 1.00% rate on qualifying food and drugs. When combined with local taxes, the rate in Chicago reaches 10.25%, making it one of the highest combined sales tax jurisdictions in the nation. Illinois’ layered structure of state, county, city, and special district taxes requires careful attention from both consumers and businesses.

Illinois Sales Tax Rates (2026)

ComponentRate
State rate (general merchandise)6.25%
State rate (qualifying food, drugs, medical appliances)1.00%
Average combined (state + local)~8.83%
Chicago combined rate~10.25%

Combined Rates by Major Area

AreaCombined Rate (General)
Chicago~10.25%
Cook County (outside Chicago)~9.00% — 10.00%
Springfield~8.75%
Rockford~8.25%
Peoria~9.50%
Naperville~7.75%
Champaign~9.00%
Bloomington~8.25%

How Illinois Sales Tax Works

Multi-Layered Structure

Illinois sales tax is technically composed of several separate taxes:

TaxRateScope
State Retailers’ Occupation Tax (ROT)5.00%Statewide, general merchandise
State Service Occupation Tax5.00%Services involving tangible personal property
State Use Tax5.00%Out-of-state purchases used in Illinois
Municipal ROT0.25% — 1.75%Cities (varies)
County ROT0.25% — 1.75%Counties (varies)
Home Rule taxesVariesHome rule municipalities
Mass Transit District taxVariesRTA/MCTD areas
Effective state rate (with mandatory 1.25% local share)6.25%Statewide

The state distributes a portion of the 6.25% base rate back to local governments. Cities and counties may impose additional taxes on top of the state rate.

Reduced Rate on Food and Drugs

Illinois taxes qualifying grocery food, drugs, and medical appliances at a reduced state rate of 1.00% (instead of 6.25%). Local taxes still apply to these items, so the combined rate on groceries is typically ~2%—3% depending on jurisdiction.

Qualifying food: Unprepared food that would be eligible for purchase with SNAP benefits. Prepared food, candy, soft drinks, and alcohol are taxed at the full rate.

What Is Taxable and What Is Exempt

Reduced Rate (1.00% state + local)

  • Qualifying food for home preparation
  • Prescription and nonprescription drugs
  • Medical appliances and equipment

Full Rate (6.25% state + local)

  • Prepared food, restaurant meals, candy, soft drinks
  • Clothing and footwear (no exemption)
  • Electronics, furniture, appliances, and general merchandise
  • Vehicles (subject to a separate 6.25% tax collected at registration)

Exempt

  • Farm machinery and equipment (with valid certificate)
  • Manufacturing machinery (with valid certificate)
  • Newspapers and magazines (exempt from state and local taxes)
  • Certain energy products (gasohol, biodiesel blends at reduced rates)

Comparison to National Average

MetricIllinoisNational Average
State base rate6.25%~5.09%
Average combined rate~8.83%~6.60%
Chicago combined rate~10.25%—
Grocery tax1.00% state + local~32 states exempt
Clothing exemptionNo~8 states

Illinois has one of the highest average combined sales tax rates in the nation. Unlike most states that fully exempt groceries, Illinois taxes them at a reduced rate — still a cost that adds up for families spending on everyday food.

Tips for Minimizing Illinois Sales Tax Impact

  1. Understand the grocery rate difference. Food for home preparation is taxed at ~2%—3% combined (much lower than the ~9%—10% on prepared food). Buying groceries instead of eating out saves significantly on tax.
  2. Shop outside Chicago for large purchases. A $2,000 appliance purchase in Chicago costs ~$205 in sales tax versus ~$155 in a suburb with a lower combined rate. The 2%—3% difference matters on big-ticket items.
  3. Track sales tax for the federal deduction. If you itemize, you can deduct either state income tax or sales tax (not both). Given Illinois’ high sales tax rates, comparing the two may be worthwhile for taxpayers with large purchases, subject to the $10,000 SALT cap.
  4. Use exemption certificates for business purchases. Manufacturers and farmers should obtain and use valid exemption certificates to avoid paying sales tax on qualifying machinery and equipment.
  5. Watch for prepared food classification. The distinction between “food” and “prepared food” is important. Heated items, items served with utensils, and items combined by the seller into a ready-to-eat form are classified as prepared food and taxed at the full rate.
  6. Monitor local tax changes. Illinois municipalities frequently adjust local sales tax rates. Home rule cities in particular can impose additional taxes without a public referendum.

Key Takeaways

  • Illinois’ 6.25% state rate combined with local taxes produces average rates of ~8.83%, reaching ~10.25% in Chicago
  • Groceries, drugs, and medical appliances are taxed at a reduced 1.00% state rate (plus local taxes), not fully exempt
  • Clothing is not exempt in Illinois
  • The multi-layered tax structure means rates vary substantially between jurisdictions
  • Chicago has one of the highest combined sales tax rates of any major U.S. city
  • Shopping outside high-rate jurisdictions for large purchases can produce meaningful savings

Next Steps