Chicago's Sales Tax Rate and What It Covers

Chicago's combined sales tax rate is 10.25 percent as of 2024. This rate is made up of the Illinois state sales tax (6.25 percent), the Cook County sales tax (1.75 percent), and the Chicago city sales tax (2.25 percent). The tax applies to most goods you buy in Chicago, including clothing, electronics, groceries, and restaurant meals.

Not everything is taxed at the same rate. Some items are taxed lower or not at all. Unprepared food you buy at a grocery store—like raw vegetables, meat, or bread—is taxed at 1 percent instead of the full rate. Prepared food from restaurants, bakeries, and deli counters is taxed at the full 10.25 percent. Medicine and medical devices prescribed by a doctor are not taxed.

The tax you see on a price tag is not included in the displayed price at most stores. When you go to checkout, the cashier adds the 10.25 percent to your total. Online purchases shipped to Chicago addresses are also subject to this tax, though the seller may or may not collect it at the time of purchase.

Key Takeaways

  • Chicago's sales tax is 10.25 percent, made up of state, county, and city taxes combined.
  • Unprepared groceries are taxed at 1 percent, while prepared food and most other goods are taxed at the full rate.
  • Prescription medications and medical devices are not subject to sales tax in Illinois.
  • The sales tax is added at checkout and is not included in the displayed price at most retailers.
  • Online purchases shipped to Chicago are subject to sales tax, though collection practices vary by seller.

The Difference Between Prepared and Unprepared Food

The biggest tax break for Chicago shoppers is on unprepared groceries. If you buy a raw chicken breast, a head of lettuce, or a loaf of bread at a grocery store, you pay only 1 percent sales tax. This applies to almost all food items you cook yourself at home, including frozen vegetables, pasta, rice, and canned goods.

The moment food is prepared for you, the full 10.25 percent tax kicks in. A rotisserie chicken from the grocery store deli counter is taxed at the full rate. A sandwich from a deli is taxed at the full rate. Coffee and a pastry from a café are taxed at the full rate. Even items like hot pizza, fried chicken, or salad bar items are taxed at 10.25 percent because they are considered prepared food.

This rule can be confusing at the grocery store. A package of cookies you buy from the shelf is taxed at 1 percent. A single cookie from the bakery counter is taxed at 10.25 percent. The difference is whether the store prepared it or a manufacturer did.

Items That Are Not Taxed

Illinois law exempts certain items from sales tax entirely. Prescription medications—any drug that requires a doctor's prescription—are not taxed. Over-the-counter medicines like aspirin or cold medicine are taxed at the full rate, but prescription drugs are not.

Medical devices prescribed by a doctor are also exempt. This includes items like diabetic test strips, hearing aids, and prosthetics. However, you must have a prescription or doctor's order for the exemption to explore. Items that look medical but are sold without a prescription—like elastic bandages or heating pads—are taxed normally.

Clothing and shoes under $110 per item are not taxed in Illinois. If a single item costs $110 or more, the full tax applies to the amount over $110. A $100 shirt is not taxed. A $150 jacket is taxed on the $40 over the $110 threshold.

How Sales Tax Is Collected and Paid

Retailers in Chicago collect sales tax from customers at the point of sale and send it to the state and local governments. The store does not keep the tax—it is passed along to the Illinois Department of Revenue, Cook County, and the City of Chicago. Most stores add the tax at checkout, though some display prices with tax already included.

Online retailers have different rules depending on where they are located and how much they sell. Large online retailers like Amazon collect and send Chicago sales tax automatically. Smaller sellers may not collect it, in which case you may owe the tax yourself when you file your personal tax return, though this is rarely enforced for individual purchases.

If you buy something online from a seller outside Illinois and have it shipped to Chicago, you are technically responsible for paying the tax if the seller did not collect it. In practice, this is difficult to track and enforce for individual shoppers.

Sales Tax on Services and Specific Items

Most services are not subject to sales tax in Chicago. Haircuts, car repairs, plumbing work, and medical services are not taxed. However, some services that include a product are taxed on the product portion. If you have your car detailed, the labor is not taxed, but any products applied to your car may be.

Certain items have their own rules. Gasoline is taxed at the full 10.25 percent rate. Cigarettes and tobacco products are taxed, plus they have an additional state excise tax on top. Alcohol is taxed at the full rate. Lottery tickets are not subject to sales tax.

Rental items like hotel rooms and car rentals are subject to tax. A hotel stay in Chicago is taxed at the full rate. A car rental is also taxed. These taxes are added to your bill by the business renting to you.

How to Calculate Sales Tax on Your Purchase

To find the sales tax on an item, multiply the price by 0.1025. A $50 item costs $50 × 0.1025 = $5.13 in tax, for a total of $55.13. For unprepared groceries, multiply by 0.01 instead. A $50 grocery purchase costs $50 × 0.01 = $0.50 in tax, for a total of $50.50.

Most calculators and smartphones have a built-in calculator app. Enter the price, multiply by 1.1025 to get the total with tax included, or multiply by 0.1025 to get just the tax amount. Many stores also display the tax amount on your receipt so you can see exactly how much you paid.

When you are shopping online, the tax is usually calculated automatically at checkout once you enter your Chicago address. If it is not, you can use the same math to estimate what you will owe.

Frequently Asked Questions

Do I pay sales tax on groceries in Chicago?

Unprepared groceries are taxed at 1 percent, not the full 10.25 percent. This includes raw meat, vegetables, bread, pasta, and canned goods. Prepared food like rotisserie chicken, deli sandwiches, and bakery items are taxed at the full rate.

Is clothing taxed in Chicago?

Clothing and shoes under $110 per item are not taxed. Items $110 or more are taxed on the amount over $110. A $150 coat is taxed on $40 of the purchase price.

Do I have to pay sales tax on online purchases?

Large online retailers collect and send Chicago sales tax automatically. Smaller sellers may not collect it. If tax was not collected, you are technically responsible for paying it yourself, though this is rarely enforced for individual purchases.

Are prescription medications taxed?

No. Prescription medications are exempt from sales tax in Illinois. Over-the-counter medicines like aspirin are taxed at the full rate.

What is the difference between Chicago's sales tax and other Illinois cities?

Chicago's rate is 10.25 percent because of the city's 2.25 percent local tax. Other Illinois cities have different local tax rates, so their combined rate varies. Some suburbs have rates as low as 7.25 percent or as high as 10.5 percent, depending on the city and county.