* From Chris Kennedy’s appearance on Rick Pearson’s WGN Radio show yesterday…
When we look at revenue options, let’s look at the tax cheats that are operating in Illinois. Let’s look at the people who say they live in another state and continue to have their jobs here and take income in Illnois and don’t pay income tax here.
The state of New York, the state of California started taxing those people. I talked to the fellow who helps collects those taxes in New York just last week and he said it’s billions of dollars in tax revenue that they get in New York from people who visit there and work, take meetings and work. And we should tax those people here.
If you look at Kennedy’s infrastructure plan, he says Illinois should pass a “Florida Tax to tax people who live out of state but earn income in Illinois.”
* Greg Hinz explains…
According to Taxpayers’ Federation of Illinois President Carol Portman, the current tax code is pretty good at collecting money from professional athletes when they play in town—that provision sometimes is called the “Michael Jordan” clause, after the former Bulls star—but largely lets visiting accountants, lawyers, consultants and others off the hook unless they exclusively work here or their business is based here.
“States like New York are more aggressive and tax nonresidents spending just a few workdays there,” Portman says.
In fact, some businesspeople abuse the loophole, intentionally maintaining their official residence in a low-tax state while working here most of the time, says the sponsor of the Senate bill, Chicago Democrat Kwame Raoul. Still, “This is a complicated subject. We have to do it the right way,” he says.
The Civic Federation’s Laurence Msall agrees with Portman that Illinois should consider following the lead of New York, which “taxes you on your first day of working there.” Potentially, the state could net tens of millions of dollars a year in revenue by fully collecting such a tax, he adds.
But both Msall and Portman say there would have to be either reciprocity with other states—we’ll exempt your road warriors if you exempt ours—or a provision creating an Illinois tax credit for taxes paid to other states. That would cut down on the income.
…Adding… Rep. La Shawn Ford (D-Chicago) introduced a bill on this topic last May…
Amends the Illinois Income Tax Act. Provides that compensation paid to individuals whose service is performed both within and without this State, but is not otherwise treated as paid in this State under the Act, is paid in this State to the extent that compensation is paid for services performed within this State.