Illinois holiday shoppers pay highest sales taxes in Midwest

Retailers should expect a record number of holiday shoppers this weekend. Shoppers in Illinois will get hit with some of the nation’s highest sales taxes.

Holiday shopping nationwide is expected to set record numbers this weekend, with the National Retail Federation predicting more than 166 million shoppers at brick-and-mortar stores and online this weekend.

For Illinoisans, it means paying the nation’s 8th highest sales tax when you combine the state and average local rate, the only Midwestern state in the top 10.

Matthew Shay of the federation said soaring inflation won’t keep people away from shopping on Thanksgiving Day through Cyber Monday.

“While there is much speculation about inflation’s impact on consumer behavior, our data tells us that this Thanksgiving holiday weekend will see robust store traffic with a record number of shoppers taking advantage of value pricing,” Shay said.

Illinoisans will also get to experience holiday shopping without a mask mandate or restrictions on store capacity and hours for the first time since the pandemic.

Before 2021, online retailers such as Amazon and Ebay only had to charge the 6.25% state sales tax. Now, the “Leveling the Playing Field for Illinois Retail Act” requires online retailers to charge local sales taxes to customers. For Chicagoans, that’s an extra 10.25%.

Saturday, Nov. 26, is known as Small Business Saturday, where customers are encouraged to shop small local retailers rather than big stores.

Chris Davis, Illinois state director for the National Federation of Independent Business, said the day is crucial to local businesses.

“We are optimistic about the holidays and certainly encourage consumers to shop local and get out on Small Business Saturday and have some patience and grace with small businesses,” Davis said.

New research by the Illinois Policy Institute gives another reason: Illinois’ small businesses led the pandemic job recovery. Businesses with fewer than 20 employees were the only sector to grow, adding over 53,000 jobs while larger businesses lost about 180,000 jobs since before the pandemic through the end of 2021.