Illinois sin taxes hit cigarettes, other tobacco and vaping products, beer, wine, spirits, cannabis, and every form of legal gambling, and the state sits at the higher end of the national range on most of them. A pack of cigarettes carries $2.98 in state excise tax before any local add-on. Spirits are taxed at $8.55 per gallon. Cannabis can face a combined tax load above 30 percent in parts of the Chicago area. Casinos and sportsbooks pay graduated rates that top out at 50 percent and 40 percent of their revenue, respectively.
Cigarettes, Cigars, and Vaping Products
Illinois taxes cigarettes at 149 mills per cigarette, which comes out to $2.98 on a standard 20-pack.1Illinois General Assembly. 35 ILCS 130 – Cigarette Tax Act Distributors buy tax stamps from the state and affix one to each pack before it reaches a retail shelf, so a budget brand and a premium brand owe the state the same amount.
Everything else in the tobacco aisle is taxed as a percentage of the wholesale price. Cigars, pipe tobacco, smokeless tobacco, and electronic cigarettes all moved to 45 percent of wholesale on July 1, 2025, up from 36 percent for traditional products and just 15 percent for e-cigarettes.2Illinois Department of Revenue. FY 2025-31, Changes to the Tobacco Products Tax The state tax on vaping products effectively tripled overnight.
Beer, Wine, and Spirits
Alcohol is taxed by the gallon, with the rate set by alcohol content rather than by what the bottle is called. Under the Liquor Control Act of 1934, the three brackets are:3Illinois General Assembly. 235 ILCS 5 – Liquor Control Act of 1934
- Beer and cider from 0.5% to 7% ABV: $0.231 per gallon
- Wine and other liquor under 20% ABV: $1.39 per gallon
- Spirits and any liquor at 20% ABV or above: $8.55 per gallon
The jump at 20 percent ABV is the one to watch. A fortified wine at 19 percent pays $1.39 a gallon; a dessert wine at 21 percent lands in the $8.55 bracket next to whiskey.4Illinois Department of Revenue. Excise Tax Rates and Fees Manufacturers and importing distributors remit the tax, but the cost ends up in the shelf price.
Federal excise tax stacks on top. Beer runs up to $18 per barrel at the standard rate, wine runs $1.07 to $3.40 per gallon, and distilled spirits run $2.70 to $13.50 per proof gallon depending on volume.5Alcohol and Tobacco Tax and Trade Bureau. Tax Rates An Illinois shopper buying a bottle of bourbon pays both layers in the final price.
Adult-Use Cannabis
Cannabis carries the most layered tax structure of any product in Illinois. At the register, the state excise tax has three tiers based on potency and product type:4Illinois Department of Revenue. Excise Tax Rates and Fees
- Flower and products with adjusted THC at or below 35%: 10% of the purchase price
- Cannabis-infused products such as edibles, tinctures, and beverages: 20% of the purchase price, regardless of THC level
- Concentrates and products with adjusted THC above 35%: 25% of the purchase price
“Adjusted” THC isn’t the number on the label. The formula adds the delta-9 THC percentage to 0.877 times the THCA percentage, and the result can push a product into a higher bracket than the front panel suggests.
Before any of that, cultivators and craft growers pay a 7 percent cultivation privilege tax on gross receipts from their first sale to a dispensary or processor.6Illinois Department of Revenue. Cannabis Tax Frequently Asked Questions That cost is baked into wholesale pricing and flows through to the retail tag.
Casinos and Video Gaming Terminals
Casino electronic gaming devices pay a graduated privilege tax that climbs sharply with revenue:7Illinois General Assembly. 230 ILCS 10/13 – Illinois Riverboat Gambling Act
- Up to $25 million: 15%
- $25–50 million: 22.5%
- $50–75 million: 27.5%
- $75–100 million: 32.5%
- $100–150 million: 37.5%
- $150–200 million: 45%
- Over $200 million: 50%
Table games use a simpler schedule: 15 percent on the first $25 million in adjusted gross receipts and 20 percent above that. The Chicago casino operates on its own split that divides revenue between the state and the city. Casinos also collect an admission tax of $2 to $3 per patron.
Video gaming terminals in bars, restaurants, and truck stops are taxed at 35 percent of net terminal income, up from 34 percent as of July 1, 2024.8Illinois General Assembly. 2025 Update Wagering in Illinois The remaining 65 percent of net terminal income is split evenly between the host establishment and the terminal operator.
Sports Betting
Illinois rewrote its sports wagering tax in 2024. Since July 1, 2024, both online and in-person operators pay a graduated rate on annual adjusted gross receipts:9Illinois General Assembly. 230 ILCS 45/25-90 – Sports Wagering Act
- Up to $30 million: 20%
- $30–50 million: 25%
- $50–100 million: 30%
- $100–200 million: 35%
- Over $200 million: 40%
A separate per-wager tax applies to online bets only: 25 cents per wager on the first $20 million in wagers, then 50 cents per wager above that. Retail sportsbook bets are exempt from the per-wager charge.
What a Winning Bettor Owes
The operator’s tax is not the bettor’s tax. Sportsbooks, casinos, and other gambling operators have to issue IRS Form W-2G for certain payouts. For 2026, the reporting threshold for sports wagers and certain other gambling payments is $2,000, with annual inflation adjustments after that.10Internal Revenue Service. Instructions for Forms W-2G and 5754 When net winnings top $5,000 on sports wagering, sweepstakes, or lottery-type games, the operator withholds 24 percent for federal income tax before paying out.
Illinois does not add a separate state withholding on gambling winnings, but the money is still taxable on your Illinois return at the state’s flat income tax rate.
Local Add-Ons Can Multiply the Bill
State rates are the starting point. Local governments pile on, and in the Chicago area the add-ons are heavy.
Cigarettes are the clearest example. On top of the $2.98 state tax, Cook County imposes its own per-pack excise and the City of Chicago adds a third layer. The combined excise load on a pack bought in Chicago sits well over $7 before sales tax enters the picture. In a downstate town with no local tobacco tax, the register total is noticeably lower.
Cannabis works the same way. Municipalities and counties can each enact their own cannabis retailers’ occupation tax.11Illinois Department of Revenue. Cannabis Taxes Stacked on the state’s 10 to 25 percent consumer excise, the 6.25 percent state sales tax, and the cultivation privilege tax already in the wholesale price, the total tax on one purchase can clear 30 percent. Dispensaries use the Department of Revenue’s online tax rate finder because the combined rate varies by address.
Home-rule municipalities can also add local liquor taxes, though the amounts are modest next to the cigarette and cannabis layers. The practical result is that identical products carry very different prices depending on where in Illinois you buy them.