Chicago City Wire

A new report found that Illinois’ state and local sales tax rates are some of the highest in the country.

The report was done by the Tax Foundation. It found that that the average combined sales tax rate in Illinois was approximately 8.8 percent. 

“Illinois has the seventh-highest combined sales tax rate in the country,” Katherine Loughead, a senior policy analyst with the Tax Foundation, told The Center Square. “That, in some ways, puts the state and its taxpayers at a competitive disadvantage compared to taxpayers in states where the rates are lower.”

In Illinois, the state sales tax rate is 6.2 percent, which is the 13th highest in the nation. The surrounding states have lower overall sales taxes than Illinois has.

“Illinois is missing out on a lot of revenue it could receive from certain consumer goods and services,” Loughead said, The Center Square reported. “One of the ways in which Illinois could really generate some new revenue in a good way, rather than an economic economically harmful way, is by broadening the base and modernizing it to a bigger basket of consumer goods and services.”

Loughead said that with average local sales taxes in some places in the state, the sales tax is extremely high.

“That can cause some issues with individuals choosing to make larger purchases perhaps in lower tax jurisdictions,” Loughead said, The Center Square reported. “Whether that be in the suburbs instead of the city of Chicago, for instance, where the combined rate is really high at 10.25 percent, or even across state lines into Wisconsin, where the sales tax rate is very low.”

Tennessee and Louisiana have the highest rates in the country, while Alaska, Delaware, Montana, New Hampshire and Oregon do not have sales tax at all.

Loughead said sales tax has benefits.

“One of the benefits of the sales tax is people know about how much they pay in any given year or at least on any given transaction,” Loughead said to The Center Square. “They can determine whether they think the government services they receive are on-par with the amount of taxes they're having to pay.”