* Jake Griffin takes a look at the optional municipal sales tax add-on, which raised nearly $1 billion for local governments last year above and beyond their share of the state sales tax…
Last year, 296 towns imposed a sales tax on top of the state’s 6.25 percent, Illinois Department of Revenue data show. That’s up from 185 towns eight years ago. And elected officials in 173 of those towns have the authority to raise sales tax rates without asking voters for permission. […]
Increasing the sales tax rate is a much “easier sell” than raising property taxes because sales taxes are charged to nonresidents as well, Sagona said. That’s why municipal sales taxes have become increasingly popular and local governments haven’t been shy about increasing rates.
Money raised by municipal sales taxes has risen 51.8 percent since 2006, while the amount all Illinois towns receive from a separate 1 percent share of the state’s sales tax has increased just 11.9 percent, according to the revenue department figures.
The extra municipal sales taxes represent 22 percent of the $4.7 billion in total sales taxes paid to counties, all Illinois municipalities, the Regional Transportation Authority and a few other local government entities in 2014. […]
From 2006 to 2014, the number of towns charging home-rule sales taxes increased from 134 to 173. But the highest growth came in the form of voter-approved municipal sales taxes, which were charged in 123 towns last year, up from 51 in 2006.
The point of the story is some local governments may look at that sales tax as a way to cushion the blow of the governor’s proposed budget cuts. Then again, plenty of towns are already maxing out on the tax.