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Illinois State Taxes

Illinois-Income-Taxes

State Income Taxes in Illinois

The state of Illinois is one of a few states with a flat individual income tax. Similar to states such as Colorado and Utah, Illinois’ individual tax rate is a percentage of your Federal Adjusted Gross Income, which is only 4.95%.

State Business Taxes in Illinois

The state of Illinois has two different types of Business taxes. A flat Corporate Income Tax and a Personal Property Replacement Tax (PPRT). The flat Corporate tax rate is 7.00% and is assessed only on C Corporations. The PPRT is assessed as follows: 

  • C-Corporations – 2.5% on Net Income
  • Flow-thru entities (LLCs, S-Corp, etc) – 1.5% on Net Income

Franchise Tax in Illinois

In addition to the Corporate & PPTR tax, Illinois also has a franchise tax. The franchise tax is assessed on the capital assets of the business. The tax rates are 0.15% for the first year in business, and 0.10% for every additional year in business. There is a minimum tax of $25 per year. Currently there are plans to eliminate the franchise tax by 2024.

Sales and Property Taxes in Illinois

Sales Taxes in Illinois – Like most states, Illinois has both a state and local sales tax. Its state sales tax is 6.25% and it’s local sales tax has an average rate of 2.83% (which puts the state average at 9.08%). Illinois has the 6th largest sales tax rate in the country.

Property Taxes in Illinois – the average property tax rate for residential property in the state of Illinois is 2.05%, which is well above the national average. In fact, Illinois is the 2nd most expensive state regarding property tax as a percentage of value in the country (behind New Jersey).

Payroll Taxes in Illinois

Unemployment taxes usually consist of three factors. They are: the wage base, the range of UI rates, number of schedules. Below is an outline of the three:

  • Wage Base – Illinois has a wage base of $12,960
  • UI Rates – range from 0.48% to 6.80%
  • Schedules – Illinois has a single rate schedules regarding UI

Illinois Business Entities – LLCs

Illinois is one of the more expensive states in regards to opening an LLC. Here are some important facts:

  • Illinois’ annual LLC fee is $75 a year
  • When you register with the state, you pay a one time fee of $150
  • Secretary of State of Illinois website – click here

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