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Today’s number: $1 billion

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* 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.

posted by Rich Miller
Wednesday, Feb 25, 15 @ 9:39 am

Comments

  1. Yep.

    Comment by A guy Wednesday, Feb 25, 15 @ 9:52 am

  2. Some towns will put on more sales tax, along with other revenue increases, and blame it on the state. This gives them cover, and they will probably raise more then what they lose from the state.

    Comment by DuPage Wednesday, Feb 25, 15 @ 9:57 am

  3. Of course they have, they need more tax money to make up for all of the property tax revenue they’ve doled out via TIFs to the Wal-Marts of the world.

    Comment by Mittuns Wednesday, Feb 25, 15 @ 9:59 am

  4. I wouldn’t count on local governments letting Rauner off the hook as far as raising taxes is concerned. I’m sure they’re appreciative of him attempting to put them on the spot. I’m sure they’re just kicking back and thinking that raising the local sales tax is a good idea. uh hum sure…

    And thanks A Guy for the informative comment. Appreciate that.

    Comment by PublicServant Wednesday, Feb 25, 15 @ 10:04 am

  5. Not a surprise.

    Finding new sources of tax revenue and ensuring that existing taxes do no harm is basic good government.

    I believe that all municipalities should consider all tax revenues, ensuring that their government services are never endangered. Promises unmet are worse than no promises. Depending upon only a few sources of tax income jeopardizes the long term sustainability of a government.

    Anti-tax citizens are not cheap. They are anti-tax when they do not see value for their taxes. When governments are ran badly, they fail to provide value. Lowering taxes to satisfy citizens angry over their taxes, doesn’t solve this problem. Citizens value good government and will pay taxes up to the point where they see value for their taxes.

    Comment by VanillaMan Wednesday, Feb 25, 15 @ 10:04 am

  6. Is Springfield the champ?

    Comment by Mouthy Wednesday, Feb 25, 15 @ 10:29 am

  7. So BVR wants to freeze real estate taxes and hack the income tax and get the locals to raise sales tax….shrewd, veryyyyyyy shrewd

    Comment by Anonin' Wednesday, Feb 25, 15 @ 10:34 am

  8. == Is Springfield the champ? ==

    Nope. Springfield is 8.5% total; highest listed in Illinois is 9.75% total. Lots of cities at 9% or higher.

    Comment by RNUG Wednesday, Feb 25, 15 @ 10:42 am

  9. == Citizens value good government and will pay taxes up to the point where they see value for their taxes. ==

    I would expand that to say, based on when I lived in Chicago, that citizens will even accept a certain level of “corruption tax” IF they receive the expected level of services.

    Comment by RNUG Wednesday, Feb 25, 15 @ 10:59 am

  10. Thanks RNUG. If it takes voter approval to increase property taxes and city counsels such as Springfield can increase the taxes themselves, is it any wonder why sales tax increases are so popular..

    Comment by Mouthy Wednesday, Feb 25, 15 @ 11:08 am

  11. Agreed RNUG. In some measure those same citizens become part in parcel part of the corruption in some manner. It’s not corruption tax. It’s corruption dues.

    Comment by A guy Wednesday, Feb 25, 15 @ 11:09 am

  12. As a non-resident increased use of municipal sales taxes are a great reason to have UPS deliver my purchases . . . .

    Comment by Out Here In The Middle Wednesday, Feb 25, 15 @ 11:21 am

  13. == corruption dues ==

    Thought the PC term these days was “user fees”.

    Comment by RNUG Wednesday, Feb 25, 15 @ 11:27 am

  14. ===Thought the PC term these days was “user fees”. ===

    No, think “right to work.” The word “dues” makes more sense.

    lol

    Comment by Rich Miller Wednesday, Feb 25, 15 @ 11:37 am

  15. Is Amazon required to collect local sales taxes depending on the residency of its customers?

    Comment by Helpful Hardware Man Wednesday, Feb 25, 15 @ 11:40 am

  16. == s Amazon required to collect local sales taxes depending on the residency of its customers? ==

    State only, so far (6.25%).

    Comment by Cheswick Wednesday, Feb 25, 15 @ 12:14 pm

  17. We shop sales tax rates like other bargain hunters do other prices. Saved $650+ on a recent van purchase on sales taxes alone. It does add up pretty quick.

    Comment by Nilwood Wednesday, Feb 25, 15 @ 1:43 pm

  18. === Saved $650+ on a recent van purchase on sales taxes alone===

    Not unless you broke the law. Your vehicle sales tax is based on where you live, not where you buy.

    Comment by Rich Miller Wednesday, Feb 25, 15 @ 1:45 pm

  19. Nilwood doesn’t have local sales taxes. Spfd dealers insisted that they have to collect them.

    Comment by Nilwood Wednesday, Feb 25, 15 @ 1:58 pm

  20. Go register that car without proof of paying sales tax. Get back to us.

    Comment by A guy Wednesday, Feb 25, 15 @ 2:12 pm

  21. We paid the state tax, just not local taxes.

    Comment by Nilwood Wednesday, Feb 25, 15 @ 2:23 pm

  22. If you have no local or county tax as a component of your sales tax, then you paid precisely what was due.

    Comment by A guy Wednesday, Feb 25, 15 @ 4:04 pm

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