Overview
- The tax holiday was included in Illinois' fiscal 2027 budget and begins as a ten-day program this month to lower costs for back-to-school shopping.
- During the window the state’s portion of sales tax is reduced by five percentage points for qualifying school supplies and clothing priced under $125, but local sales taxes still apply.
- Governor J. B. Pritzker promoted the measure as help for families facing higher prices and said officials listened to parents' concerns about affordability.
- Tax policy analysts and the Tax Foundation say the holiday will give only modest, uneven savings, will mostly shift the timing of purchases, and will create new compliance and operational burdens for retailers.
- The short tax break follows a separate, permanent 0.25 percentage-point sales-tax increase passed last winter for six Chicago-area counties to fund public transit, complicating the overall change in consumers' tax burdens.