Sorry, Illinois, but you’re the least tax-friendly state in the country for middle-class families

IllinoisNickname

Kiplinger

State Income Tax Range: 4.95% (flat rate)
Average Combined State and Local Sales Tax Rate: 8.83%
Median Property Tax Rate: $2,165 per $100,000 of assessed home value


Sorry, Illinois, but you’re the least tax-friendly state in the country for middle-class families. For all three taxes we’re tracking – income, sales, and property taxes – you tax middle-income residents at an above average rate (at least). And for one of those taxes, the rates are extremely high. That’s enough to put the Land of Lincoln in the most undesirable spot on our list.

At first blush, the state’s 4.95% flat income tax rate doesn’t seem that steep when compared to other states’ top tax rates. And that’s true if you’re talking about wealthy residents. But for middle-class taxpayers, the income tax rate is on the high end. When we ran tax returns for all 50 states and the District of Columbia for our hypothetical middle-class family, the Illinois income tax bill was tied for the ninth-highest in the country.

Sales taxes in Illinois are high, too. There’s a 6.25% state tax on purchases in Illinois (1% on groceries and prescription drugs). Plus, up to 4.75% in local taxes are tacked on in certain places within the state. All told, the average combined state and local sales tax in Illinois is 8.83%, which is the seventh-highest combined sales tax rate in the U.S.

The tax situation really goes downhill fast for Illinois residents when you look at the property taxes they have to pay. Property taxes in Illinois are the second-highest in the nation. If our hypothetical family purchased a $300,000 home in the state, their average annual property tax bill would be an eye-popping $6,495.

For more information on these and other Illinois state taxes, see the Illinois State Tax Guide for Middle-Class Families.

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