Minimum Sales Rate Tax for 2024
| 6.25% | Column content | Column content | Column content | Column content | |
| 1.25% | Column content | Column content | Column content | Column content | |
| 1.75% | Column content | Column content | Column content | Column content | |
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| Scientific & Cultural Fac.(cd) | Column content | Column content | Column content | Column content | |
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| Minimum combined sales tax rate value | 10.25% | Column content | Column content | Column content | Column content |
| Special tax | Column content | Column content | Column content | Column content | |
| Economic sales nexus threshold | $100,000 | Column content | Column content | Column content | Column content |
| Transactions threshold | 200 | Column content | Column content | Column content | Column content |
| Sales tax return filing due date | 20th of the month following the reporting period. | Column content | Column content | Column content | Column content |
The base state sales tax rate in Illinois is 6.25%, but since the city-specific tax rate is 1.25% and the Clark County tax rate is 1.75%, the minimum sales tax rate for Chicago is 10.25%.
How to calculate your sales tax rate
Use our online sales tax calculator to determine the combined state and local sales tax rate for each location where you have a physical or economic nexus. Just enter your state and ZIP code to get your sales tax rate.
Looking for help calculating your sales tax? Contact us today to book a free consultation!
What is nexus?
In Chicago, businesses must understand “nexus” to determine their tax obligations. Nexus refers to the connection that requires a business to collect sales tax in a state. This concept became even more important after the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc., which allowed states to require sales tax collection based on economic activity rather than just a physical presence.
Specific sales tax rules for Chicago
Chicago imposes a tax on the rental of automobiles. This tax is typically collected by rental agencies and added to the rental fee.
A tax is also applied to hotel and motel stays. This includes not only traditional hotel rooms but also short-term vacation rentals like those booked through platforms such as Airbnb. The tax is generally calculated as a percentage of the room rate and can vary based on the type of accommodation.
Chicago also imposes a tax on parking services. This includes parking at garages, lots, and on-street parking meters. The tax is generally a percentage of the parking fee and is meant to cover both public and private parking spaces.
While Illinois does not impose a sales tax on SaaS at the state level, Chicago’s Personal Property Lease Transaction Tax (Chicago lease tax) is important for SaaS businesses to understand. Notably, the current law imposes a reduced tax rate of 5.25% for SaaS products, compared to the standard 9% for other leased properties. The tax applies when customers in Chicago use the provider’s computer and software to handle their own data, distinguishing it from database products where the data is supplied by the provider.
Services
Generally not taxable, with exceptions for repairs, amusement park admissions, and cleaning services.
Goods
In general most goods such as appliances, cars, furniture, sporting goods, and electronics, are subject to sales tax.
Clothing
Taxable.
Electronics
Taxable.
SaaS
Taxable.
Digital Products
Generally not taxable.
Software
Taxability varies; consult the Illinois Department of Revenue or a tax professional for specifics.
Freight/Shipping
Generally not taxable, but charges related to taxable services (e.g., packing or installation) may be taxable.
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