Wednesday, August 7, 2019

Illinois Taxes You May Not Know About


Every state has tax laws in place. However, Illinois is known for having some particularly high tax rates, which can be a bummer if you live there. Whether you like it or not, however, you have no control over the tax laws.   


What you can do, though, is to increase your knowledge about tax laws. That way, while you might not like the laws, you’ll at least be aware of them so they won’t come as an ugly surprise, and there definitely are some that you might not have known about.

Sales Tax
Most people do know that sales tax exists, though few are clear on exactly how much it is or what it applies to.
In Illinois, the sales tax rate is 6.25%. This doesn’t include any sales taxes that localities add, which can further increase taxes owed and varies from place to place. For that reason, educate yourself on the different tax rates in different areas of Illinois. That way, you can plan your shopping in a smart way.

Also, bear in mind that some items receive a lower tax rate of 1%. This typically includes items you need, such as prescription drugs, over the counter medicines, most food items, and medical equipment or supplies.

Soft Drink Tax
If you venture to the big city of Chicago, you’ll quickly learn that there’s a soft drink tax in effect. Retailers have to pay a 3% tax on their soft drink sales. And, if there’s a soda fountain in place, a 9% tax is applied.

So, what counts as a “soft drink?” The rule is any drink that is less than 50% juice falls into this category.

Gas Tax
Finally, take note of when and where you fill up your car.

Illinois boasts a 29 cents per gallon tax rate for unleaded gasoline. Diesel, on the other hand, has a 41.7 cents per gallon tax rate- still pretty steep!

Some counties, including Cook County and Chicago, charge up to six cents more than others, which can really add up over time. Thus, fuel with care and planning!

Taxes are no fun, but they are a part of life. Just educate yourself on what they apply to and where. Then, plan accordingly to avoid as much taxation as you possibly can…though, unfortunately, you’ll never escape it all.

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