Illinois Sales Tax Rate and What It Covers

Illinois has a state sales tax of 6.25 percent, which applies to most goods you buy in stores. When you make a purchase, this percentage is added to the price at checkout. However, the total tax you pay often includes local taxes on top of the state rate — your city or county may add between 0.25 and 2.25 percent, so the final tax can range from 6.25 to 8.5 percent depending on where you shop.

The state tax applies to tangible personal property — items you can touch and take home. This includes clothing, electronics, furniture, groceries at checkout (though some food items have exceptions), and most household goods. Services are generally not taxed in Illinois, so you do not pay sales tax on haircuts, repairs, or professional fees.

Some items are exempt from sales tax entirely. These include prescription medications, certain medical equipment, and some food products bought for home consumption — though prepared food, candy, and soft drinks are taxed. Agricultural equipment and machinery used directly in farming also avoid the tax.

Key Takeaways

  • Illinois state sales tax is 6.25 percent, but your actual tax rate depends on your city and county, which can add 0.25 to 2.25 percent on top.
  • Sales tax applies to goods you buy in stores but not to services like repairs or professional fees.
  • Prescription medications, some medical equipment, and certain food items for home use are exempt from sales tax.
  • Online purchases from out-of-state sellers may not have Illinois tax added at checkout, but you may owe use tax when you file your state return.
  • Resale certificates allow businesses to buy goods without paying sales tax if they plan to resell them.

Local Sales Tax Rates by City and County

Illinois does not have a single statewide sales tax rate because cities and counties add their own local taxes on top of the 6.25 percent state rate. Cook County (which includes Chicago) adds 1.25 percent, bringing the total to 7.5 percent in most of the city. However, Chicago itself adds an additional 1.25 percent tax on certain items, making some purchases subject to 8.75 percent or higher.

Outside Chicago, rates vary widely. Some counties and municipalities add only 0.25 percent, while others add closer to 2.25 percent. The difference matters when you shop near city or county borders — the same item can cost different amounts depending on which side of the line you buy it on. You can find your exact local rate by entering your address on the Illinois Department of Revenue website or by asking a cashier.

Some cities also impose additional taxes on specific items. Chicago, for example, has a higher tax rate on prepared food and beverages than on groceries. These local variations mean that the tax you pay depends on exactly where the transaction occurs, not where you live.

What Happens With Online and Out-of-State Purchases

When you buy from an online retailer based outside Illinois, the seller may not add Illinois sales tax at checkout. This does not mean the purchase is tax-free — instead, you may owe use tax on the item. Use tax is essentially the same as sales tax and is meant to level the playing field between local and remote sellers.

Large online retailers (Amazon, Walmart, Target, and similar companies) now collect Illinois sales tax on most purchases, even if they ship from out of state. Smaller sellers and marketplaces may not. If you buy from a seller who does not collect tax, you are technically required to report the purchase on your Illinois state income tax return and pay the use tax yourself — though most individual shoppers do not do this.

The rule is: if sales tax was not charged at the time of purchase, and the seller does not have a physical location in Illinois, you may owe use tax. Check your receipt to see whether Illinois tax was added. If it was not, and the purchase was significant, you can report it when you file your state return.

Food and Grocery Exceptions

Most food bought for home consumption is not subject to sales tax in Illinois. This includes bread, milk, vegetables, meat, canned goods, and frozen meals you prepare at home. The tax-free category covers most items you would find in the grocery aisle.

However, several food items are taxed. Prepared food — sandwiches made to order, hot food from a deli counter, or meals from a restaurant — is taxed at the full rate. Candy, soft drinks, and energy drinks are also taxed, even if you buy them at a grocery store. Alcohol and tobacco are taxed as well. The distinction is whether the item is ready to eat or drink versus something you prepare yourself.

If you are unsure whether a specific item is taxed, look at your receipt. The cashier will not charge tax on exempt groceries, so if tax appears on your receipt for a food item, that item falls into the taxed category.

Resale Certificates and Business Purchases

If you own a business and buy goods to resell to customers, you can use a resale certificate to avoid paying sales tax on your wholesale purchases. This certificate tells the seller that you plan to resell the item, so the tax will be collected from the end customer instead of from you.

To obtain a resale certificate, you register with the Illinois Department of Revenue and receive a certificate number. You provide this number to your suppliers when you place orders. The supplier keeps a copy of your certificate on file and does not charge you sales tax. You then collect sales tax from your customers when they buy the goods.

Resale certificates are only valid for items you actually resell. If you buy something for business use — office supplies, equipment, or furniture for your store — you still pay sales tax on those purchases because they are not being resold to customers.

Tax on Services and Professional Work

Illinois does not impose sales tax on most services. If you hire a plumber, electrician, accountant, lawyer, or other professional, you do not pay sales tax on their labor. The same applies to haircuts, dry cleaning, car repairs, and home maintenance services. The tax applies only to the goods involved, not the work itself.

There are narrow exceptions. Some services bundled with goods — like installation or delivery — may be taxed if they are inseparable from the product. For example, if you buy a new water heater and the seller installs it as part of the sale, the entire transaction might be taxed. However, if you hire an independent contractor to install something you already own, that labor is not taxed.

When you receive an invoice from a service provider, the tax line should be blank or show zero. If you see sales tax charged on a service, ask the provider why — it may be an error, or the invoice may include taxable goods along with the service.

How Sales Tax Is Collected and Reported

Retailers collect sales tax at the point of sale and hold it temporarily. They then file monthly or quarterly returns with the Illinois Department of Revenue, reporting the total sales and the tax collected. The retailer sends the tax money to the state, and the state distributes a portion to local governments based on where the sale occurred.

As a consumer, you do not file anything related to sales tax — the retailer handles all reporting. Your only responsibility is to pay the tax shown on your receipt. If you make out-of-state purchases and owe use tax, you report that on your state income tax return, but most individual taxpayers do not do this in practice.

Businesses that collect sales tax must keep records of their sales and tax collected. If you run a business, the Illinois Department of Revenue can audit your records to verify that you collected and reported the correct amount of tax.

Frequently Asked Questions

Do I pay sales tax on groceries in Illinois?

Most groceries are not taxed — bread, milk, vegetables, meat, and canned goods are all tax-free. However, prepared food, candy, soft drinks, and alcohol are taxed. Check your receipt to see which items were charged tax.

What is the sales tax rate in Chicago?

Chicago's combined sales tax is 7.5 percent in most neighborhoods (6.25 percent state plus 1.25 percent city). Some items like prepared food have a higher rate of 8.75 percent. The exact rate depends on your specific location within the city.

Do I owe tax on items I buy online from out-of-state sellers?

Large retailers like Amazon and Walmart collect Illinois tax on most purchases. Smaller sellers may not. If tax was not charged at checkout, you may owe use tax, which you can report on your state income tax return, though most individual shoppers do not.

Is sales tax charged on services like haircuts or repairs?

No. Illinois does not tax services — only the goods involved in the transaction. A haircut, car repair, or plumbing job is not taxed. If you see tax charged on a service, ask the provider to explain why.

How do I find the exact sales tax rate for my area?

You can enter your address on the Illinois Department of Revenue website to see your local rate, or ask a cashier at any store. The rate depends on your city and county and can range from 6.25 to 8.5 percent.