Chicago's combined sales tax is 10.25 percent, made up of state, county, and city layers

When you buy something in Chicago, you pay Illinois state sales tax (6.25 percent) plus Cook County sales tax (1.25 percent) plus the City of Chicago sales tax (2.25 percent). That adds up to 10.25 percent on most purchases. The tax is calculated on the sale price and added at checkout — you do not pay it separately, but it appears on your receipt.

The rate applies to tangible goods: clothing, groceries, electronics, furniture, and most other items you can touch and take home. Services — haircuts, repairs, consulting — are generally not taxed in Illinois. Some items have special rules: groceries for home use are taxed at a lower rate (1 percent state tax instead of 6.25 percent), and certain items like prescription medications are exempt entirely.

If you buy something online from a seller with a physical location in Illinois or a large national retailer, you pay Chicago sales tax at checkout. Smaller out-of-state sellers may not collect it, though Illinois residents are technically responsible for reporting unpaid tax on their state return — in practice, this rarely happens.

Key Takeaways

  • Chicago's 10.25 percent sales tax is the sum of three layers: 6.25 percent state, 1.25 percent county, and 2.25 percent city.
  • Groceries for home consumption are taxed at only 1 percent state tax, not the full 6.25 percent.
  • Services like haircuts and repairs are not subject to sales tax in Illinois.
  • Online purchases from major retailers are taxed the same way as in-store purchases; smaller out-of-state sellers may not collect tax.

How the three tax layers break down

Illinois charges 6.25 percent state sales tax on most goods. Cook County, which contains Chicago, adds 1.25 percent on top of that. The City of Chicago then adds its own 2.25 percent. Each layer is calculated on the same base price, so they stack: $100 of taxable goods costs $110.25 after tax.

This three-layer system exists because each government — state, county, and city — uses sales tax revenue for different purposes. The state uses it for general operations. Cook County uses it for county services. Chicago uses it for city services, including public safety and infrastructure. The breakdown matters mainly if you are comparing prices across different Illinois cities or counties, which have different combinations of county and city rates.

What is and is not taxed in Chicago

Most tangible goods are taxed: clothing, shoes, electronics, furniture, toys, books, and household items all carry the full 10.25 percent rate. Groceries are the major exception — food you buy at a grocery store for home use is taxed at only 1 percent state tax, with no county or city tax added. This means a gallon of milk costs roughly 1 percent more; a prepared sandwich from a deli counter is taxed at the full rate because it is considered prepared food.

Services are not taxed: a haircut, car repair, plumbing, accounting, or legal consultation has no sales tax. Prescription medications are exempt. Certain medical equipment and mobility aids are exempt. Newspapers and magazines are exempt. The line between a good and a service can be blurry — if you buy a shirt, it is taxed; if you pay someone to alter it, that labor is not taxed separately.

Sales tax on online and out-of-state purchases

Large online retailers like Amazon, Walmart, and Target collect Chicago sales tax on orders shipped to Chicago addresses. They do this because they have a physical presence in Illinois or meet federal thresholds that require them to collect sales tax. The tax appears in your total at checkout, just as it would in a store.

Smaller out-of-state sellers — particularly those with no Illinois warehouse or office — may not collect Chicago sales tax. Technically, Illinois law requires you to report the purchase price of untaxed items on your state income tax return and pay "use tax," which is the same rate as sales tax. In practice, very few individuals do this, and the state does not pursue it for small purchases. If you are a business buying inventory from out-of-state sellers, the rules are stricter and you should track these purchases.

Who collects and where the money goes

The seller collects sales tax at the point of sale — the store, the website, or the checkout counter. They then remit it to the Illinois Department of Revenue, which distributes the state portion to the state treasury. Cook County and the City of Chicago receive their portions separately. Retailers are responsible for calculating the correct rate, filing returns (usually monthly), and paying on time. If a business fails to collect or remit sales tax, it can face penalties and interest.

As a buyer, you do not file anything or send money anywhere. The tax is built into the price you see at checkout. Your receipt shows the tax amount, which can be useful for record-keeping if you are a business owner deducting purchases or if you are tracking spending for budgeting purposes.

Sales tax differences in nearby areas

If you shop in suburbs outside Chicago but still in Cook County, the rate is lower: 8.5 percent instead of 10.25 percent (6.25 percent state plus 1.25 percent county, with no city tax). If you shop in DuPage County or Will County, the rate is different again — typically 8.25 percent or 8.375 percent depending on the specific location. These differences add up on large purchases, which is why some people shop strategically across county lines for big-ticket items.

If you live in Chicago but work or shop regularly in a suburb, knowing the local rate can help you understand why a receipt from one location looks different from another. The difference is always the city tax layer — Chicago's 2.25 percent — which does not explore outside city limits.

Frequently Asked Questions

Is Chicago sales tax higher than other major cities?

Chicago's 10.25 percent rate is among the highest in the country. New York City is 8.875 percent, Los Angeles is 9.5 percent, and Houston has no city sales tax. Within Illinois, Chicago is the highest because of its 2.25 percent city rate; most suburbs are lower.

Do I pay sales tax on groceries in Chicago?

Groceries for home use are taxed at 1 percent, not 10.25 percent. This includes milk, bread, produce, and packaged foods. Prepared foods — deli sandwiches, hot pizza, restaurant meals — are taxed at the full rate.

Can I get a sales tax refund if I move out of Chicago?

No. Sales tax is final at the point of purchase. If you buy something in Chicago and then move, you do not get a refund. If you buy something out of state and bring it to Chicago, you do not owe additional tax.

Do I owe use tax on items I buy from out-of-state websites?

Technically yes, but it is rarely enforced for individuals. If a seller does not collect sales tax, Illinois law says you should report the purchase on your state return and pay use tax at the same rate. Most people do not, and the state focuses enforcement on businesses rather than individual shoppers.