Shoppers pay 9% sales tax on Christmas gifts in Illinois

Illinois shoppers will pay an average 8.81% in sales taxes on presents this holiday, the eighth most nationwide. Some Cook County communities will charge up to 11.5%.

Illinois holiday shoppers will pay an average 8.81% in combined sales taxes on presents this giving season, the most in the Midwest and eighth most nationwide.

Sales taxes will cost Chicagoans even more. Shopping in Illinois’ largest city will add 10.25% in combined sales taxes to the price of each gift. The Cook County communities of Harvey and Harwood Heights charge shoppers the highest sales tax rates in Illinois: 11.5%.

Even Illinois’ online shoppers will now pay their hometown’s full sales tax for presents. And during the rest of the year, they get to shoulder the nation’s highest combined state and local tax burden.

Lawmakers have options to reduce sales tax on the purchase of gifts. One way is to extend state and local taxes to the price of services.

Most services are generally not taxed in Illinois. That means state residents pay more sales taxes on a carton of eggs than to lease a private jet. More evenly distributing taxes between goods and services could help lower the overall tax rate.

Another fix is to address Illinois’ nation-leading public pension crisis with constitutional reform. Illinoisans pay the nation’s second-highest property taxes, as well as local sales taxes, to cover growing contributions to our $75 billion local pension debt. That debt is in addition to the $140 billion owed to the statewide public pension systems.

Constitutional pension reform, alongside a more balanced tax system, would provide Illinoisans with necessary financial relief and put more money back into their pockets for the next holiday.