Does Illinois Have Sales Tax? Rates, Exemptions, and Online Rules

Yes, Illinois does have a sales tax. The state charges 6.25% on most retail purchases of physical goods, and city, county, and district add-ons can push the combined rate as high as 11% in some locations.¹ Services are generally not taxed, and as of January 1, 2026, the state’s 1% tax on groceries is gone, though your city or county may still charge its own 1%.²

What You Actually Pay Depends on Where You Buy

The 6.25% state rate is only the floor. Municipalities, counties, and special taxing districts can add anywhere from nothing to roughly 4.75% on top.³ A purchase in a rural area with no local add-on is taxed at 6.25%. The same purchase in Calumet City, Glenwood, or Indian Head Park is taxed at 11%.¹ Blended by population, the statewide average lands near 8.96%.

To find the exact combined rate for a specific address, the Illinois Department of Revenue publishes a tax rate database.⁴ Which address controls depends on how the sale is fulfilled. If a retailer ships from inventory located in Illinois, the rate is based on where that inventory sits. If the item ships from outside the state to an Illinois buyer, the rate is based on the delivery address.⁵

What Gets Taxed and What Doesn’t

The general rule is that Illinois taxes retail sales of tangible personal property. Clothing, electronics, furniture, appliances, vehicles, and essentially any other physical item bought for personal use fall under the tax.³

Services are generally not. A plumber’s labor, a lawyer’s time, or a mechanic’s hours are not subject to Illinois sales tax.⁶ There is one wrinkle worth knowing. When a service provider installs or hands over physical property as part of the job, that property is taxed under what Illinois calls the Service Occupation Tax. On a car repair invoice, the parts line usually carries tax while the labor line does not.

Groceries and Medicine

The grocery tax situation changed on January 1, 2026. Illinois eliminated the 1% state sales tax that previously applied to food bought for off-premises consumption, so qualifying groceries are now fully exempt at the state level.² The exemption does not cover soft drinks, candy, alcoholic beverages, food infused with cannabis, or meals prepared for immediate consumption.⁷

The same law that repealed the state tax authorized municipalities and counties to impose their own 1% local grocery tax by ordinance.² Some have adopted it, some have not, so whether groceries ring up tax-free depends on your city or county.

Prescription and non-prescription medicines, medical appliances, insulin, blood sugar testing supplies, and certain FDA-classified cancer treatment devices are taxed at a reduced state rate of 1%, with local tax still potentially layered on top.⁷

Online and Out-of-State Purchases

Most major online retailers already charge Illinois sales tax at checkout. Out-of-state sellers and marketplace facilitators (platforms like Amazon or eBay that handle sales for third-party sellers) must collect and remit Illinois tax once their sales into the state hit $100,000 or more in gross receipts during the applicable lookback period. The previous 200-transaction threshold was eliminated as of January 1, 2026.⁸ Marketplace facilitators that meet the threshold collect on behalf of every third-party seller using the platform.⁹

If you buy something from a smaller out-of-state seller that doesn’t collect Illinois tax, you technically owe Use Tax on the purchase at the same rate you’d have paid locally.¹⁰ For small amounts, Illinois makes self-reporting simple: if your total Use Tax liability for the year is $600 or less, you can report and pay it on a dedicated line of your Form IL-1040 individual income tax return. If you owe more than that, you file a separate Form ST-44 by April 15 of the following year.¹¹

Buying a Car or Other Titled Property

Sales tax on vehicles, boats, and aircraft isn’t paid at a cash register. It’s collected when you apply for a title and registration with the Illinois Secretary of State.¹² The rate on titled property is the standard 6.25% of the purchase price.¹³

How you handle the paperwork depends on who you bought from:

From a licensed Illinois dealer, the dealer typically files the paperwork and submits the tax for you as part of the title transaction.
From a private party, you file Form RUT-50 and pay any tax due to the Secretary of State within 30 days of the purchase date.¹⁴
From an unregistered out-of-state dealer or leasing company, you file Form RUT-25 instead.¹⁴

Missing the 30-day window doesn’t erase what you owe, and late penalties can be added.

Exemptions Worth Knowing

Machinery and equipment used primarily in manufacturing tangible goods for sale are fully exempt from Illinois sales tax. The exemption covers the production machines themselves, not consumable supplies or office equipment, and it applies whether the manufacturer sells the finished goods directly or through another company.¹⁵

Sales to qualifying charitable, religious, and educational organizations, along with sales to governmental bodies, are also exempt. The buyer must hold a valid exemption identification number issued by the Illinois Department of Revenue.¹⁶

1
Illinois Department of Revenue. Sales Tax Rate Change Summary, Effective January 1, 2026
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Illinois Department of Revenue. Illinois Grocery Tax Changes Effective January 1, 2026
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Illinois Department of Revenue. Illinois Sales and Use Tax Matrix
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Illinois Department of Revenue. Tax Rate Database
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Illinois Department of Revenue. Destination-Based Sales Tax Assistance
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Illinois Department of Revenue. Does Illinois Tax Sales of Service
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Illinois General Assembly. Illinois Code 35 ILCS 105 3-10
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Illinois Department of Revenue. FY 2026-12 Destination-Based Retailers Occupation Tax Changes
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Legal Information Institute. Illinois Code 86-131.145 – Marketplace Facilitators
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Illinois Department of Revenue. Use Tax on Titled or Registered Tangible Personal Property
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Illinois Department of Revenue. Use Tax for Individuals – Questions and Answers
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Illinois Department of Revenue. Private Party Vehicle Use Tax
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Illinois Department of Revenue. Use Tax Rates
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Illinois Department of Revenue. RUT-50 Instructions for Private Party Vehicle Use Tax Transaction
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Legal Information Institute. Illinois Code 86-130.330 – Manufacturing Machinery and Equipment
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Illinois Department of Revenue. Sales and Property Tax Exemptions