Illinois residents paid the highest combined state and local tax rate in the country last year, according to WalletHub. The effective tax rates for a median Illinois household reached almost 17 percent, surpassing the national average of just over 11.02 percent and ranking above New York, which had a rate of 14.95 percent.
The issue matters to many households because it affects their overall cost of living. The median amount paid by an Illinois household in state and local taxes was $12,538 last year, making it the fourth-highest figure nationally. In comparison, the national median was about $8,949. These amounts are based on different household measurements.
The state’s high tax burden is driven by property taxes as well as sales and excise taxes that exceed both national averages and those found in neighboring states. Property taxes alone have an effective rate of 1.92 percent of a typical home’s value—more than double the national median of 0.89 percent. Sales taxes are also higher than average; Illinois has a state sales tax rate of 6.25 percent with an average combined state and local rate approaching nine percent.
In response to these figures, Deputy Republican Leader Ryan Spain has filed HB 5738 to offer relief for taxpayers through a temporary gas sales tax holiday lasting six months from July 1 through December 31, 2026. “Spain says it is the right thing to do for both consumers and the state’s economy.” Spain was elected to represent Illinois’ 73rd House District in 2017 after replacing former representative David R. Leitch,according to Ballotpedia.
Broader implications remain as lawmakers consider options for easing financial pressure on families across Illinois.
