Cook County businesses buying goods elsewhere will receive a little more purchasing leeway than originally proposed, if County Board President Toni Preckwinkle’s budget is approved.
Preckwinkle is proposing a 1.25 percent tax on goods purchased by county business owners outside the county’s borders. Initially, the first $2,500 worth of purchases on office supplies, equipment, building materials and even artwork was exempt from the tax. However, on Monday Preckwinkle announced that she has raised the limit and proposes exempting the first $3,500 of such purchases.
The move will shave about $1 million off the projected revenue generated by the new tax next year, which is now expected to be $14 million.
She said in a news release that altering the proposed tax “is making it easier for local business to thrive in our communities, expand their operations and hire new workers.
“The economic policies in this year’s budget will help make Cook County a more vibrant economic hub in the region for years to come,” she said.
The new tax is mirrored on use taxes already employed by Illinois and city of Chicago. Preckwinkle said the tax favors county businesses because it provides incentives to purchase locally. She has begun calling the measure the “Buy Local Tax.”
Over the past four years, the county has eliminated a 1 percent sales tax instituted by the previous administration, which hurt suburban businesses the most, county officials said.
However, critics of the new tax plan believe Preckwinkle should lower sales taxes further, in lieu of the new tax on businesses, to make everyone want to shop in the county.
Businesses are responsible for self-reporting inter-county purchases to the county’s revenue department. Because many businesses are already practicing this with similar state and city of Chicago taxes, county officials anticipate higher levels of compliance.
The county already applies a tax on titled items like cars, boats and other vehicles. The budget is expected to be voted on by the full board next month.Copyright © 2013 Paddock Publications, Inc. All rights reserved.