CONSUMERS in a key US state will be forced to shell out more cash on their shopping runs as the sales tax jumps in just a few days.
Once July 1 hits, shoppers around the state will see their local sales tax increase by up to 2% thanks to new laws.
Shoppers in a key US state will have to pay more during their shopping runs[/caption]
Consumers in the state will see their local sales tax jump by up to 2%[/caption]
State and local sales taxes are forms of consumption taxes that individual states and local governments such as cities and counties impose on the purchase of goods and services.
A way for these governing bodies to pull in revenue, local taxes are often tacked on top of state taxes.
Local sales tax rates can vary significantly within a state, with 38 out of 45 states with statewide sales taxes permitting local governments to impose their own sales taxes.
Residents across Illinois will soon see a spike in their local sales tax as a series of new tax hikes roll out on July 1.
Roughly 50 municipalities in the state will see their local sales tax rise when next month comes around, with increases ranging from 0.25% to 2%.
Some of the municipalities that can expect to see the greatest sales tax increase include Colfax, Danvers, and Hudson, according to a notice from the Illinois Department of Revenue.
The following taxes will be affected by the law:
- Business district sales tax
- County public safety, public facilities, mental health, substance
abuse, or transportation sales tax - County school facilities sales tax
- Home rule municipal sales tax
- Non-home rule municipal sales tax
As the local sales taxes increase, the new costs will be in addition to the 6.25% base state sales tax rate in Illinois.
The average combined state and local sales tax rate in the state was 8.86% last year, per the Tax Foundation.
Residents can use the MyTax Illinois Tax Rate Finder on the Illinois Department of Revenue website to check their new combined state and local sales tax rate.
SAFE FOR NOW
As the locally imposed sales taxes across Illinois increase, shoppers will see a key exemption.
The extra costs will impact regular retail stores but will not apply to most grocery items.
The tax hikes specifically target “general merchandise,” per the notice from the Illinois Department of Revenue.
More laws on the way
When July 1 rolls around, a number of other tax increases will hit residents of Illinois:
- Gas Tax Increase: the gas tax will increase from 45 cents per gallon to 48.3 cents per gallon
- Diesel Fuel Increase: the tax on diesel fuel will increase from 54 cents per gallon to 55 cents per gallon
- Sports Betting Tax: a tax of 25 cents per wager will be levied on the first 20 million wagers with licensed sportsbooks, and increase to 50 cents per wager after the first 20 million
Source: WROK 1440 AM
The local sales tax increases will not apply to qualifying food, drugs, and medical appliances.
Although the impending local tax jumps do not impact groceries, a significant change to how groceries are taxed is on the horizon.
Starting on January 1, 2026, Illinois will effectively eliminate the statewide 1% tax on groceries.
However, a new law will give counties and municipalities the right to set their own local grocery tax of up to 1% on groceries.
Illinois residents will also see a huge “bottle” change thanks to a new July 1 law – and the ban targets all of your shower supplies.
Plus, the state will see its energy bills skyrocket under a new June policy – and residents will spot a mysterious “capacity charge.”
