Chicago's sales tax rate and what it covers
Chicago's combined sales tax rate is 10.25% as of 2024. This rate combines the Illinois state sales tax (6.25%), Cook County tax (1.75%), and Chicago city tax (2.25%). The rate applies to most retail purchases — clothing, groceries, electronics, household goods — though some items are taxed differently or not at all.
Not everything you buy in Chicago is taxed at the full 10.25%. Unprepared food (groceries you cook at home) is taxed at a lower rate of 1% under Illinois law. Prepared food from restaurants, bakeries, and food vendors is taxed at the full rate. Medicine and medical devices have their own rules: prescription drugs are not taxed, but over-the-counter medications are taxed at the full rate.
Services are generally not taxed in Chicago. Haircuts, car repairs, plumbing work, and consulting fees do not have sales tax added. However, some services bundled with products — like installation or delivery — may be taxable depending on how the vendor structures the charge.
Key Takeaways
- Chicago's sales tax is 10.25%, made up of state (6.25%), county (1.75%), and city (2.25%) portions.
- Unprepared groceries are taxed at only 1%, while prepared food and restaurant meals are taxed at the full 10.25%.
- Prescription drugs are not taxed, but over-the-counter medications and vitamins are taxed at the full rate.
- Services like haircuts and repairs are not subject to sales tax, but products sold with those services usually are.
When you pay sales tax in Chicago
You pay sales tax at the point of purchase — when you buy something at a store, restaurant, or online retailer. The tax is calculated on the subtotal before any discounts are applied, though some retailers apply discounts after tax. The vendor collects the tax from you and sends it to the state and local tax authorities each month or quarter, depending on their filing schedule.
Online purchases from out-of-state retailers have changed over the past few years. If you order from a company that has a physical presence in Illinois (a warehouse, office, or store), that company must collect Chicago sales tax on your order. If the company has no presence in Illinois, they may not collect tax — but Illinois law now requires you to report and pay that tax yourself on your state income tax return, though most people do not.
If you buy something in Chicago and take it out of state, you do not pay Chicago tax — you pay the tax rate of the state where you take possession. If you buy something online from outside Illinois and have it shipped to a Chicago address, the seller should charge you Chicago tax if they have nexus (a legal connection) to Illinois.
Items taxed differently or not at all
Understanding what is and is not taxed helps you predict your total cost. Groceries — bread, milk, vegetables, meat, canned goods — are taxed at 1%. This lower rate does not apply to hot food, food you eat in the store, or items from the deli counter that are ready to eat. A rotisserie chicken from the grocery store is taxed at 10.25%, but raw chicken is taxed at 1%.
Clothing and shoes under $110 are not taxed in Illinois. This means a $100 pair of jeans has no sales tax added in Chicago. A $150 pair of jeans is taxed on the full amount. Designer handbags, belts, and accessories over $110 are taxed at the full rate. Clothing for children follows the same rule — it is the price of the item, not the age of the wearer, that determines whether tax applies.
Newspapers and magazines are not taxed. Textbooks and school supplies are taxed at the full rate. Diapers and feminine hygiene products are not taxed in Illinois. Vitamins and dietary supplements are taxed at the full rate, even if sold in a pharmacy.
How to calculate what you will pay
To estimate your total cost, multiply the taxable subtotal by 0.1025. If you buy a $50 item taxed at the full rate, the tax is $5.13, for a total of $55.13. If you buy $50 in groceries, the tax is only $0.50 (1% rate), for a total of $50.50. Most receipts show the tax amount separately, so you can verify the calculation.
When you see a price tag in a Chicago store, that price does not include sales tax — the tax is added at checkout. This is different from some countries where the displayed price includes all taxes. Budget for the full amount including tax when you are shopping, especially for larger purchases.
If you are buying a mix of taxed and untaxed items, the cashier or online system calculates tax on each item separately. A receipt showing groceries, clothing under $110, and a magazine will have tax applied only to items that are taxable at the full rate.
Who collects and where the money goes
The retailer or vendor collects sales tax from you and holds it temporarily. They then send it to the Illinois Department of Revenue, which distributes the money to the state, Cook County, and the City of Chicago according to the tax rate breakdown. The state gets 6.25%, the county gets 1.75%, and the city gets 2.25% of each sale.
Chicago's portion of sales tax revenue funds city services, infrastructure, and operations. Cook County's portion supports county services. The state portion supports state programs and services. Businesses are responsible for collecting, tracking, and remitting this tax — if a business fails to do so, they can face penalties and interest.
Sales tax on specific purchases
Cars and vehicles have their own rules. When you buy a car in Chicago, you pay sales tax on the purchase price. The tax is calculated and collected by the dealer or private seller, and you report it when you register the vehicle with the Illinois Secretary of State. Trade-in value reduces the taxable amount — if you trade in a car worth $5,000 toward a $20,000 purchase, you pay tax only on $15,000.
Gasoline is taxed, but the tax is included in the pump price — you do not see it listed separately. Illinois adds state and federal excise taxes to gasoline, and Chicago's local sales tax applies as well. The total tax on gas is higher than the 10.25% sales tax rate because of these additional fuel-specific taxes.
Alcohol is taxed at the full sales tax rate, plus additional state and local excise taxes on beer, wine, and liquor. A bottle of wine shows the sales tax at checkout, but there are also hidden taxes built into the wholesale price.
Frequently Asked Questions
Does Chicago sales tax apply to online orders?
Yes, if the online retailer has a physical presence in Illinois (a warehouse, store, or office). Amazon, for example, collects Chicago sales tax on orders shipped to Chicago addresses. If an out-of-state retailer has no presence in Illinois, they may not collect tax, though you are technically required to report and pay it yourself.
Why is restaurant food taxed differently than grocery store food?
Illinois taxes prepared food at the full rate because it is considered a service — someone prepared it for you. Unprepared groceries are taxed at 1% to keep basic food affordable. The line is whether the food is ready to eat: a deli sandwich is taxed at 10.25%, but deli meat you buy to make a sandwich at home is taxed at 1%.
Are there any purchases that have zero sales tax?
Yes. Prescription drugs, newspapers, magazines, clothing under $110, diapers, and feminine hygiene products have no sales tax in Illinois. Services like haircuts and repairs are not taxed. Some medical equipment and mobility aids may also be exempt, depending on the specific item.
What happens if a business charges me the wrong sales tax?
If you notice a receipt shows incorrect tax, contact the business immediately. Most errors are honest mistakes in how the system categorized an item. If the business refuses to correct it, you can file a complaint with the Illinois Department of Revenue, though recovering small amounts is often not practical.
Do I pay Chicago sales tax if I buy something in Chicago but live in another state?
Yes, you pay Chicago's 10.25% rate at the point of purchase in Chicago, regardless of where you live. If you take the item out of state, you do not pay additional tax in your home state — the sale already happened in Chicago.