Last-minute Christmas shopping? Illinoisans brace for sky-high sales taxes
The holiday season is a time for giving. And, by the time Illinoisans complete their shopping, they’ll have given plenty – to state and local governments.
As the holidays draw nearer, hustling procrastinators will jostle through packed malls across the country.
But for Illinoisans in particular, fighting through crowds is only one way in which they’ll get squeezed while last-minute shopping. Another will take place at the cash register.
This is because Illinois’ combined state and local sales taxes rank among the highest in the country. According to an analysis from the nonpartisan Tax Foundation, Illinois’ average combined state and local sales tax burden is ranked No. 7 in the nation.
Illinois’ average combined sales tax burden ranks No. 1 in the Midwest, according to the Tax Foundation report. In contrast, neighboring Wisconsin rests at the fourth lowest nationwide, and has the lowest sales tax burden in the Midwest.
At the state level alone, Illinois’ sales tax rate is 6.25 percent – 13th-highest, according to the Tax Foundation. But this higher-than-average rate is compounded further by rates established by local governments.
In Chicago, residents pay a combined sales tax rate of 10.25 percent – the highest combined rate of any major city in the country. This was raised from a combined rate of 9.25 percent in 2016 when Cook County raised its sales tax rate to 1.75 percent from 0.75 percent.
In July 2017, dozens of Illinois taxing districts, including the counties of Peoria and Rock Island, increased sales taxes by anywhere from 0.25 percent to 1.5 percent. However, things turned out differently when residents had a say. Voters in St. Clair County defeated two proposals for sales tax hikes. The measures asked voters to approve a 1 percent sales tax increase for public safety and a 1 percent increase for local school funding on the same ballot.
While a combined 2-percentage point uptick seems insignificant enough on its own, this increase would have only worsened some of St. Clair County’s already high sales tax burdens. For example, East St. Louis’ State Street Business District already faces a combined sales tax rate of 9.85 percent. Had both increases passed, the combined sales tax rate of East St. Louis’ State Street Business District would’ve climbed to 11.85 percent – greater than even Chicago’s burden.
That voters in Illinois are overtaxed is no new phenomenon. Decades of steepening taxation in exchange for little return is a one-way bargain to which Illinoisans have grown increasingly frustrated – just look at Cook County Board President Toni Preckwinkle’s ill-fated “soda tax.”
Hopefully, voters’ rejection of St. Clair County’s sales tax proposals and Preckwinkle’s soda tax signals a trend that state and local lawmakers would be wise to draw lessons from. Springfield and local governments across Illinois are in need of meaningful spending reforms – if for nothing else, to stop spending like last-minute Christmas shoppers with unlimited credit.