Illinois’ tax system overview:
Corporate Tax Rate: 9.5% (7% income tax and 2.5% replacement tax)
Individual Tax Rate: 5% flat rate
The tax rate increase will gradually taper off. The personal tax rate is scheduled to decrease to 3.75% in 2015 and then decrease again to 3.5% in 2025. Similarly, the corporate rate will fall to 7.75% in 2015 and then reset to the original 7.3% rate in 2025
Sales Tax:
"Sales tax” is imposed on a seller’s receipts from sales of tangible personal property for use or consumption. Tangible personal property does not include real estate, stocks, bonds, or other “paper” assets representing an interest.
Illinois Sales Tax has three rate structures — one for qualifying food, drugs, and medical appliances; one for items required to be titled or registered (vehicles); and another for all other general merchandise.
The fundamental rate for:
· Qualifying
food, drugs, and medical appliances is 1%.
· Items
required to be titled or registered is 6.25%.
· Other
general merchandise is 6.25%.
· Motor
fuel “prepaid sales tax" on Gasohol is $0.05 per gallon.
· Motor
fuel “prepaid sales tax" on all other motor fuels is $0.06 per gallon.
Home Rule:
Depending upon the location of the sale, the actual sales tax rate may be higher than the fundamental rate because of home rule, non-home rule, water commission, mass transit, park district, and county public safety sales taxes.
Home rule units of local government are authorized to impose a Home Rule sales tax and certain non-home rule units of local government are authorized to impose a Non-home Rule sales tax to be collected by the department. Both taxes are imposed on the same general merchandise base as the state sales tax, excluding
titled or registered tangible personal property (such as vehicles, watercraft, aircraft, trailers, and mobile homes), and qualifying food, drugs and medical appliances.
· The
Home Rule sales tax is in 0.25% increments with no maximum rate limit.
· The
Non-home Rule sales tax is in 0.25% increments with a 1% maximum rate limit.
Some Will County municipalities have a home rule sales tax ranging from 0.5% - 1.5%
Property Tax:
The property tax is the largest single tax in Illinois, and is a major source of tax revenue for local government taxing districts. Property tax is a tax that is based on a property’s value. It is sometimes called an “ad valorem” tax, which means “according to value.”
It is a local tax imposed by local government taxing districts (e.g., school districts, municipalities, counties)
and administered by local officials (e.g. township assessors, chief county assessment officers, local boards of review, county collectors). Property taxes are collected and spent at the local level.
Illinois does not have a state property tax.
Property can be divided into two classes — real and personal.
• Real property is land and any permanent improvements. Examples include buildings, fences, landscaping, driveways, sewers, or drains.
• Personal property is all property that is not real property. Personal property includes automobiles, livestock, money, and furniture.
Only real property is taxed in Illinois.
Generally, the property tax cycle is a two-year cycle. During the first year, property is assigned a value
that reflects its value as of January 1 of that year. During the second year, the tax bills are calculated and mailed and payments are distributed to local taxing districts.
Will County Supervisor of Assessments: www.willcountysoa.com
The Illinois Property Tax System: A General Guide to the Local Property Tax System
http://tax.illinois.gov/publications/localgovernment/ptax1004.pdf
In 2009, $1.5 billion was distributed to 253 taxing districts in Will County.
For more information, visit www.willcountytreasurer.com –
Guides to the Illinois Property Tax System and Where Your Taxes Go.
Illinois' 2011 Business Tax Climate:
Illinois ranks 23rd in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: Wisconsin (40th), Iowa (45th), Missouri (16th), Kentucky (19th) and Indiana (10th).
2011 State Business Tax Climate Index, Eighth Edition (full
study)
Tax Credits available in Illinois
Small Business Job Creation Tax Credit:
Tax credit gives small business owners in Illinois an extra boost to grow their business over the next year. After creating one or more new, full-time positions that meet the eligibility requirements, small businesses can register to receive a $2,500 per job tax credit. For more information, visit http://JobsTaxCredit.illinois.gov
Economic Development For a Growing Economy Tax Credit Program (EDGE):
The EDGE program is designed to offer a special tax incentive to encourage companies to locate or expand operations in Illinois when there is active consideration of a competing location in another State. The program can provide tax credits to qualifying companies, equal to the amount of state income taxes withheld
from the salaries of employees in the newly created jobs. The non- refundable credits can be used against corporate income taxes to be paid over a period not to exceed 10 years. To qualify a company must provide documentation that attests to the fact of competition among a competing state, and agree to make an investment of at least $5 million in capital improvements and create a minimum of 25 new full time jobs in Illinois. For a company with 100 or fewer employees, the company must agree to make
a capital investment of $1million and create at least 5 new full time jobs in Illinois. For more information, visit http://www.commerce.state.il.us/dceo/Bureaus/Business_Development/Tax+Assistance/EDGE.htm
Illinois Tax Incentives: http://business.illinois.gov/tax_incentives.cfm