Selling a business in Illinois: what the state takes (2026)
Illinois’s top individual income tax rate is 4.95%. Here is what an owner selling company stock pays, with 2026 rules from official sources and worked examples at $10 million, $25 million and $50 million.
- 4.95%
- Top Illinois income tax rate (2026)
- $1,237,500
- State tax on a $25M long-term gain
- 28.7%
- Combined federal and state rate on $25M
- 22 of 51
- Rank by total tax on $25M (1 = highest)
How Illinois taxes a business sale
- Income tax
- Top rate 4.95%: Flat rate on all net income (personal exemption $2,925 for 2026, not available above $250,000 AGI).
- Long-term capital gains
- Capital gains are taxed as ordinary income at the flat 4.95% rate; no exclusion or preferential rate.
- Entity-level taxes
- S corporations and partnerships owe the 1.5% personal property replacement tax on their net income (C corporations 2.5% on top of 7% corporate income tax), so an S corp asset sale bears 1.5% at the entity level; a sale of the owner's stock does not. Illinois also offers an elective pass-through entity tax.
- Local taxes
- No local income taxes.
Three worked examples
| Long-term gain | $10,000,000 | $25,000,000 | $50,000,000 |
|---|---|---|---|
| Federal capital gains tax (20%) | $2,000,000 | $5,000,000 | $10,000,000 |
| Net investment income tax (3.8%) | $380,000 | $950,000 | $1,900,000 |
| Illinois tax | $495,000 | $1,237,500 | $2,475,000 |
| Total tax | $2,875,000 | $7,187,500 | $14,375,000 |
| Effective combined rate | 28.75% | 28.75% | 28.75% |
| Net proceeds after tax | $7,125,000 | $17,812,500 | $35,625,000 |
| Extra tax versus Texas | $495,000 | $1,237,500 | $2,475,000 |
Seller’s tax calculator
Estimate federal and state tax on a stock sale and what is left before fees and debt.
- Long-term capital gain
- $25,000,000
- Federal capital gains tax (20%)
- $5,000,000
- Net investment income tax (3.8%)
- $950,000
- Illinois tax
- $1,237,500
- Taxable gain at 4.95%
- $1,237,500
- Total tax
- $7,187,500
- Effective rate on the gain
- 28.75%
- Net proceeds after tax
- $17,812,500
Illustration, not tax advice. Assumes a resident individual, the whole gain long-term, top marginal rates, no state credits, installment terms, QSBS exclusion or other planning, and no local taxes. Net proceeds are before transaction fees, debt repayment, escrows and earn-outs. Rates are for tax year 2026 where published; see the methodology.
Compare with other states
Neighboring states
Common comparisons
- California37.1% combined, $15.72M net
- New York34.1% combined, $16.48M net
- Texas23.8% combined, $19.05M net
- Florida23.8% combined, $19.05M net
- Nevada23.8% combined, $19.05M net
- Washington33.5% combined, $16.63M net
- Tennessee23.8% combined, $19.05M net
Methodology and sources
Illinois figures are for tax year 2026. Flat 4.95% in effect since July 1, 2017; unchanged for 2026. The proposed 3% 'millionaire tax' constitutional amendment did not pass the House in April 2026 and is not on the November 2026 ballot. The examples assume a resident individual selling privately held stock for a long-term gain equal to the sale price (zero basis), with every dollar taxed at the top marginal rates, the federal 20% capital gains rate and the 3.8% net investment income tax, and no planning, credits or local taxes. Full assumptions are in the report methodology.
All 50 states and DC with source URLs.
- 1Illinois DOR, Income tax rates
- 2Illinois Comptroller Payroll Bulletin 1-26 (2026 rate 4.95%, exemption $2,925)
- 3Capitol News Illinois, Millionaire tax amendment fails to gain enough support. Secondary source
- 4Tax Foundation, State Individual Income Tax Rates and Brackets, 2026. Secondary source
Data last updated October 26, 2026.
Cite this research
You may quote and republish figures from this page with attribution and a link to the source.
Citation
Laurent Capital Research, “The Seller’s Tax Map: What Selling a Business Costs in Every State (2026): Illinois,” 2026, https://laurent.capital/research/seller-tax-map/illinoisLink (HTML)
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