Phone: 630-495-2282 Fax: 630-495-2260 Map/Directions

July 1 changes

November 22, 2010
Tax rates up, CDF out

Dealers in the six counties of northeast Illinois are affected by a higher Chicago home rule sales tax that takes effect July 1, the same day that the 2-year-old CDF Illinois sales tax exemption expires. Several other taxing bodies also increase their tax rates July 1.


Sales tax on general merchandise purchased in Chicago, and on the autos that city residents purchase anywhere in Illinois, rises 0.25 percent July 1, bringing the total to 9 percent. The Chicago City Council passed the measure last December as part of its 2005 budget.  

All dealers must collect Chicago’s home rule tax on sales of vehicles that will be titled and registered to a Chicago address. On the revised Form ST-556 that the Illinois Revenue Department will issue in July, the new combined rate will be in the rate preprinted below Line 4. Until then, dealers must add the additional 0.25 percent to the rate preprinted below Line 4 on an existing Form ST-556.


The CDF sales tax exemption is repealed effective July 1. When the exemption began two years ago, certain vehicles that weighed more than 8,000 could avoid sales tax if the buyer applied for a "D" through "Z" class license plate and paid a Commercial Distribution Fee annually to the secretary of state. In an amendment one year ago, only vehicles used for commercial purposes qualified for the CDF sales tax exemption. 

Since the CDF cost, at most, $50 a year, the owner would have had to register the truck and pay the fee for decades to make up for the sales tax that the state coffer was forsaking.


Twenty-three units of Illinois government have either imposed or changed their sales tax rate, effective July 1. The new state and local combined rates will be preprinted on Line 4a of the revised Form ST-556.