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Illinois ranks 36th in new tax climate report

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FILE - Gov. J.B. Pritzker, 12-10-21

Gov. J.B. Pritzker speaks at a news conference on Friday, Dec. 10, 2021.

(The Center Square) – Illinois received poor rankings in the Tax Foundation 2023 Tax Climate Report.

Illinois finished 36th overall in the report, which looks at the state's corporate taxes, individual income taxes, sales taxes, property taxes, and unemployment insurance. 

Jannelle Fritts of the Tax Foundation worked on the report and said Illinois could have been ranked even lower than 36th if not for one tax. 

"Illinois is not ranked in an enviable position, but in all reality, their income tax, which is a flat rate and a relatively low rate even though it is higher than some of its neighbors, is really keeping their score up," Fritts told The Center Square. 

Illinois worst ranking on the list was in the property tax category, where they ranked as the sixth worst state. 

"Additionally, as I am sure everyone in Illinois knows, their property taxes are not very competitive," Fritts said. "Those collections tend to be very high, higher than most states." 

Illinois also is among only four states that still need to pay outstanding state unemployment trust fund debt, with $1.3 billion still left to be paid carrying interest for taxpayers. 

If not addressed by Nov. 10, the state could have its Federal Unemployment Tax Act credit reduced by 0.3% each year, according to a letter from members of the U.S. Congress to Gov. J.B. Pritzker.  

Fritts explained how this could result in even higher taxes for Illinois businesses. 

"Some of the problems that Illinois runs into with its unemployment is that it has a solvency tax," Fritts said. "If the unemployment trust fund gets lower than a certain level then tax rates will be jacked up in order to make up for the lost revenue." 

Illinois finished 38th in the corporate tax rate, 13th in the individual income tax rate, 38th in sales tax, and 43rd in unemployment tax. 

Originally published on thecentersquare.com, part of the TownNews Content Exchange.

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