Illinois Senate proposal would tax home repairs

Illinois Senate proposal would tax home repairs

Members of the home building industry say Senate Bill 9’s tax on home repairs would fall hardest on Illinois’ middle-class and senior residents.

An amendment to a bill currently sitting in the Illinois Senate would add another tax: this time, on home repairs. The legislation, Senate Bill 9, was one of the revenue-grabbing components of the so-called “grand bargain” budget proposal. The amendments to SB 9 contain a large package of new taxes and tax hikes, including taxes on internet streaming services such as Netflix, laundry services, landscaping, manicures and a host of other services and products.

Sponsored by state Sen. Toi Hutchinson, D-Olympia Fields, SB 9 and its subsequent amendments have gained considerable support among the Senate leadership of both parties, but have not yet gained enough support from rank-and-file senators.

Industry experts have voiced concern over the proposal, citing it as convoluted, hard to enforce and overly expensive. The Home Builders Association of Illinois opposes Hutchinson’s proposed tax and claims that it would cost 521 jobs, $47 million in reduced home repair and maintenance work, and a nearly $8 million reduction in revenue for state and local coffers.

Home Builders Association Vice President Bill Ward claimed the bill would hurt senior citizens and lower income residents.

“Senior citizens and other homeowners on limited income will be forced to forego needed repair work on their homes,” Ward said.

“Homes hit by fire and storm damage will be the hardest hit by this tax,” Ward said, according to The State Journal-Register. “On $20,000 damage to a home, the tax will amount to $1,250 in home repair work.”

Hutchinson’s proposed tax on home repairs would be yet another cost for Illinois’ middle class. Illinois homeowners already pay some of the highest property taxes in the country and carry one of the most expensive overall tax burdens in the nation.

The last thing homeowners need is a new tax on a basic service. And like property taxes, a tax on home repairs would also hurt senior citizens in Illinois, many of whom live on a fixed income.

The proposed home repair tax would also serve as yet another disincentive for buying a home in Illinois. The Land of Lincoln is undergoing a severe out-migration crisis, especially among prime working-age residents. From July 2015 to July 2016, Illinois’ population contracted by 37,500 residents due to out-migration, giving the Prairie State the worst population loss in the country. High taxes around home ownership such as property taxes and Hutchinson’s proposed home repair tax serve as further discouragement for people seeking to put down roots in Illinois. A poll released in October 2016 by the Paul Simon Public Policy Institute showed that nearly half of Illinois residents wanted to leave the state, and of those who wanted to leave, taxes were the No. 1 reason.

Though currently shelved in the Senate Assignments Committee, SB 9’s amendments, with its slew of new taxes and tax hikes, is by no means off the table. Many in Springfield would like to see the tax-laden proposal become law, eager for fresh revenue to feed the state’s cost drivers. SB 9 and all its tax hikes should be thrown out for good, and lawmakers should embrace taxpayer-friendly reforms that will actually encourage people to live, work and retire in Illinois.

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