Illinois ranks as the worst for local and state taxes, financial website says

PEORIA — Many of us are in the midst of doing our taxes or talking to an accountant about our taxes. 

It's tedious, and frankly not something that most of us like to do. Worse, for many of us, taxes are going up and the amount of money we get back each year, if any, is going down.

The website Wallethub.com feels your pain and compiled a study showing the states with the highest and the lowest tax rates.

Illinois residents, you already know what is coming.

More:Peoria man's retirement plans highlight gap between property taxes in Illinois and Indiana

Illinois compared with other states

WalletHub has the Land of Lincoln at 51st (including Washington, D.C.) for overall effective local and state tax rates. The website says Illinois residents have a 15.05% rate for both state and local, which comes out to about $10,463 for an average family.

By comparison, Alaska, which is seen as the best, has a rate of 6.05%, and residents there pay about $4,204 a year.

The site defines an average family as having an annual income in the "mean third quintile income of the state," owning a home at the average value within Illinois, and having a Toyota Camry LE, which was the highest selling car in 2022.

Illinois came in 50th, one from the bottom, in real estate taxes, the study found. Residents here pay $5,465 a year, based upon the assumed middle-of-the-road U.S. family. The state that came in first was Hawaii, where residents pay $700 for a similar house.

More:Proposed downtown Peoria hotel nothing like Pere Marquette deal, officials say

It's not all bad for Illinois

Illinois came in first for vehicle property taxes, mostly because the state doesn't have one, like several others in the country. Worst was Virginia, where residents pay just over $1,000 a year for vehicle property taxes.

Illinois was middle of the road for other categories, coming in at 25th for sales and excise taxes and 39th for income tax rates. Residents here pay about $2,982 in sales taxes on average, while for income taxes, the dollar amount is $2,016, according to the study.

The state got props for not being in the top five for food taxes (Illinois has none) and for cigarette taxes, but got a black mark for being one of the highest for gas taxes (50th). Those statistics were not listed in the study.

Another source:Illinois is the most unfriendly state for taxes, study says

Methodology

WalletHub compared the 50 states and the District of Columbia across four types of taxation.

In order to compare apples to apples, the study based rates and dollar amounts on what a typical American family would pay. To do that, it assumed that this family would have an income equal to $69,508 (mean third quintile U.S. income); own a home valued at $244,900 (median U.S. home value); own a car valued at $26,220 (the highest-selling car of 2022); and spend annually an amount equal to the spending of a household earning the median U.S. income.

For real estate taxes, the site divided the “Median Real-Estate Tax Amount Paid” by the “Median Home Price” in each state, then applied the resulting rates to a house worth $244,900 in order to obtain the dollar amount paid as real-estate tax per household.