Illinois taxes personal income (Flat 4.95%), and LLCs owe Personal Property Replacement Tax (PPRT). A Wyoming holding company does not erase Illinois's own entity-level obligations on a Illinois subsidiary, but it can still add liability separation and keep the parent's ownership off Illinois's public LLC filings.
Whether your Illinois LLC owes PPRT comes down entirely to member count and tax classification: a single-member LLC taxed as a disregarded entity owes $0 in PPRT, full stop. A multi-member LLC taxed as a partnership, or any LLC that's elected S-corp status, owes 1.5% of net Illinois income. An LLC taxed as a C-corporation owes 2.5%. This is reported alongside the entity's regular income tax return, not as a separate standalone filing.
The general federal tax treatment of holding companies (consolidated filings, dividends-received deductions, and the like) is set at the federal level and does not change state to state — what changes is the entity-level tax Illinois itself charges an LLC or corporation formed or registered there.
Illinois does not tax the holding company itself when it operates as a pass-through that simply owns subsidiary interests — there is no LLC franchise tax and no separate entity-level income tax at the parent. Profit that flows from operating subsidiaries up through the parent and out to members is taxed once, at Illinois's flat 4.95% personal income rate on each member's return. The wrinkle that distinguishes Illinois is the Personal Property Replacement Tax: an operating subsidiary taxed as a partnership owes 1.5% of its net income on Form IL-1065, so the PPRT is computed at the subsidiary level where the income is actually earned, not at a holding parent that earns nothing.
An Illinois C-corporation faces a combined entity-level rate of 9.5% on net income: a 7% corporate income tax plus the 2.5% Personal Property Replacement Tax (PPRT). On top of that, Illinois levies a franchise tax on Illinois-allocated paid-in capital, billed with the $75 annual report, though the first $10,000 of calculated franchise tax has been exempt since January 1, 2025 (so most small corporations pay $0 franchise tax). There is no flat statewide minimum income tax. Sales tax is 6.25% state plus local add-ons that reach 10.25% in the Chicago area.
Illinois LLCs must file Annual Report with Illinois Secretary of State, due Before the first day of the LLC's anniversary month (up to 45 days early), with a fee of $75.
Missing the deadline triggers a flat $100 late penalty on top of the $75 base fee. New entities are exempt from filing in their formation year — the first report isn't due until the following year.
A common structure pairs a Wyoming LLC as the parent with a Illinois entity handling operations, holding property, or running a Illinois-facing business.
The Illinois entity still owes whatever Illinois itself charges — Personal Property Replacement Tax (PPRT) — regardless of where its parent is formed; pairing it with a Wyoming LLC does not change the Illinois subsidiary's own filing or tax obligations. What the Wyoming parent adds is liability separation, and the Wyoming company's own ownership stays out of Illinois's public LLC filings.
For more on the general structure, see the Wyoming holding company guide and how to set one up.
Tax agency reference: Illinois Department of Revenue (tax.illinois.gov).
Note: Tax rates, fees, and thresholds shown here reflect state tax research last verified July 2026; reconfirm current figures directly at tax.illinois.gov before relying on them for a specific filing.
Illinois's tax treatment of a holding structure comes down to its personal income tax (Flat 4.95%) and its Personal Property Replacement Tax (PPRT). If you have questions about structuring a Wyoming-Illinois holding arrangement, reach out through our contact form.
If you have questions about structuring a Wyoming-Illinois holding arrangement, reach out through our contact form or call +1 (307) 683-0983 to speak with one of our experienced Business Success Advisors. Visit our homepage and blog for more.