Shoppers shrug at Naperville's higher sales tax
A 0.5 percentage point jump in Naperville's sales tax that took effect Jan. 1 appears to be having a minimal impact on shoppers -- at least initially.
The increase moves the city's sales tax rate to 7.75 percent, but that's still below what many area communities charge.
"I don't think the half-percent is going to have much of an effect, if any, on shopping behavior," Mayor Steve Chirico said Monday.
The city council approved the increase in September as part of an effort to fill a budget gap, pay down debt and add to dwindling reserves.
On Monday, it appeared many shoppers were either unaware of the new tax or unconcerned.
W.B. Washington of Naperville said he was aware of the new tax, which the city is levying for the first time under its authority as a home-rule municipality. But he said he thought the sales tax was increasing by a whole percentage point instead half of one.
"Any time taxes go up, I'm in that group that thinks it's not always the best thing," Washington said. "But I understand it. Sometimes it's a necessary thing."
Lisa Rose of Naperville knew her hometown's sales tax is lower than those charged by many neighboring towns, citing Bolingbrook's rate of 8.5 percent. But she wasn't initially aware of the recent increase.
"What isn't going up?" she said. "I'm not happy about it."
Even at 7.75 percent, Naperville's sales tax remains below the rates charged in Cook County suburbs, such as Arlington Heights, Palatine, Rolling Meadows and Schaumburg, which now charge 10 percent. Rosemont and Chicago taxes are even higher at 10.25 percent.
Chirico said the difference shows the half-point increase preserved Naperville's competitive business advantage, but Naperville Area Chamber of Commerce leaders said it diminished their edge.
The tax will be charged for two years, expiring Jan. 1, 2018, unless council members vote to extend it. This year, it's estimated to bring in $6.4 million, and next year it could bring in up to $8.5 million.
This year's projection is lower because the city isn't expected to receive payouts from the state until April, Finance Director Rachel Mayer said.
Mayer estimates the sales tax will cost the average homeowner $74.56 more a year. It won't be charged on cars, medications, groceries, restaurant food and drinks.
The increased tax rate in Naperville and the state of Illinois' finances in general had Glen Ellyn resident Mary Ann McCluskey slightly frustrated but willing to shop as usual.
"They need revenue," McCluskey said about towns like Naperville. "But I think in this state they need to figure out a way to quit raising taxes."