Chicago's Sales Tax is Going to Get Ridiculous
Posted on March 19, 2008 by Him and tagged taxes
10.25%
10.25%
10.25%
That's the amount of sales tax that will be applied to purchases made in the city of Chicago in November.
What's that mean for us?
Well, I'm definitely going to try to NOT make any large purchases in the city. For pretty much anything over $100, I'm going to turn to the stores on the intarweb for a more competitive price that includes FREE shipping and NO sales tax.
I've stated in the past that I really like to patronize local small businesses, but seriously, the sales tax is re-donk. It's a shame because it is not really the local business owners' fault for this. They're really going to get screwed.
I guess it's a good thing we've started to think about moving away from Chicago. That's too bad: I really LOVE this city. Chicago has many cultural, academic, leisure, luxury, and business resources that will be hard to live without.
But 10.25% sales tax on everything will not be missed.
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Anne | Mar 19, 2008
I agree that this tax rate is outrageous. In my case, because I have a high income but spend very little, I'd rather have high sales taxes and low income taxes than the reverse. 3% flat income tax is pretty darn low. This just highlights the fact that sales taxes are regressive, and this increase will really hurt lower income earners.
Someone with the opposite situation (e.g., a retiree) might prefer a place like Oregon which has up to a 9% marginal income tax, but no sales tax.
billy | Mar 19, 2008
purchasing stuff off the internet may not prevent you from paying the 10.25% tax, as it's likely to be subject to a "use tax", which is usually the same rate as the sales tax...
Wow! 10.25% is outta control! We pay 8.25% in L.A. County. You could always move someplace like Oregon where they have no sales tax. Or Nevada where I think they have no state income tax because it's all subsidized by gambling!
It's ideas like this that stifle local economies and end up actually shrinking the tax base instead of increasing it.
Wow, your sales tax rate will be worse than mine, which is 9.25% on most stuff, over 11% on restaurant meals, and has been reduced to a mere 6.25% on groceries. Do you have to pay sales tax on basic foodstuffs in Chicago? It's pretty darn regressive.
Fabulously Broke | Mar 20, 2008
Hah!! :)
Ontario used to be 15% and now that it's 13% we're all jumpin' for joy.. until I read this post from you LOL!!!!!
The rate hike is really going to hurt small businesses. Too bad.
Working downtown makes it easy for me to pick up things on my lunch hour but I too will have to eventually turn to the internet.
holy COW! That's insane! Philly's sales tax is about 7% but combine it with the 4% additional income and we're about even....geez...
I'm with you on the ridiculousness that is Cook County government. Some of the burbs aren't going to get off easy either.
That sales tax, plus inflation equals a LOT of beans and rice for me.
Don't feel bad because, here in Michigan something very similar happened.
The services tax exempts sports and entertainment admissions (but not ticketing agency fees). Many, but not all, services considered to be “professional services” are included. All types of “consulting” are included, many types of “service contracts” are included. Medicine, law, and accounting are not included.
Everyone in Michigan is widely impacted by this change, which went into effect on December 1, 2007. Thousands of state businesses had to become collectors of this tax from their customers and end users. The tax phased in before the end of the calendar year of 2007, it requires businesses and consumers to file “sales tax” and “use tax” results for 2007 along with their state of Michigan tax returns. Consumers of services were caught by surprise.
The creative and intellectual property service industries in Michigan (software developers, graphic designers, technical artists and writers, dance and music teachers) may be particularly hit hard.
Here’s a short list of which services are currently listed as taxed, and which are exempt:
NEW MICHIGAN SERVICE TAX OF 6% APPLIES:
* Utilities, including telephone and electricity
* Hotel, motel and bed and breakfast rentals
* Laundry service contracts, with some industry exceptions
* Carpet cleaning
* Private mailbox rental
* Word processing, PC rental and fax services
* Management and human resources consulting
* Scientific and technical consulting
* Environmental services
* Security, armed guard, patrol and protection
* Financial investment advice
* Janitorial and maid (home cleaning) services
* Lawn care and landscaping
* Snow removal
* Ticket offices and agencies - all types
* Bus tours, sightseeing excursions
* Tourist attractions
* Ski resorts not offering accommodations
* Tour operators and packagers
* Packaging, sterilization and assembly services
* Astrology
* Baby Shoe Bronzing
* Bail bonding
* Balloon-o-grams
* Coin-operated blood pressure testing machine services
* Bondspersons
* Check room services
* Coin-operated personal service machines
* Comfort station operation services
* Concierge services
* Consumer-buying services
* Credit card notification services
* Dating services
* Discount buying services
* Social escort services
* Fortune-telling services
* Genealogical investigation services
* House-sitting services
* Social introduction services
* Coin-operated rental locker services
* Numerology services
* Palm-reading services
* Party-planning services
* Pay telephones
* Personal fitness trainers
* Personal shopping services
* Coin-operated photographic machine services
* Phrenology services
* Porters
* Psychic services
* Rest-room operation services
* Shoeshines
* Singing telegrams
* House-sitting services
* Wedding chapel services
* Wedding planners
* Consulting (including lobbying)
* Tanning
* Escort services
* Massage
* Administrative services (like payroll)
* Private investigators
* Labeling
* Business service centers
* Carpet and upholstery cleaners
* Couriers and messengers
* Document preparation services
* Self-storage
* Transit and ground passenger services
* Taxicabs and limousines
* Office administration
* Travel agents
* Interior design
* Commercial art and graphic design
* Medical illustration
* Warehousing and storage
* Weight loss and diet centers
* Repair of shoes, appliances, computers
* Repair of tools, clothing, electronics
* Repair of office machinery, watches and jewelry
* Alarm system services
* Word processing, secretarial services
* Resume preparation
* Editing and proofreading
EXEMPT FROM THE NEW MICHIGAN 6% SERVICES TAX:
* Cable television
* Sports and entertainment tickets (but not ticketing fees)
* Golf
* Movies (but not ticketing fees)
* Legal services
* Accounting services
* Medical services
* Architectural services
* Haircuts and hair care (but not other spa or salon services)
That is an unbelievable tax rate - what do they expect people to buy in Chicago now? For example, who will stay in the area to buy a car? They will simply buy it elsewhere and get insurance and the like back home. (Although they might get the sales tax when registering the car.) This will also definitely lead to a trend which will harm small businesses in the area, and it would also make me consider relocating if I lived there.
Jerry
www.leads4insurance.com
Marty | Mar 24, 2008
Oh no, 10.25%. Try Toronto, it's was 15% here a year ago. Now it's only 13%, ya. Plus the 23% income tax. Chicago sounds nice ... but wait ... we have free health care. It's a toss-up, but I'll stick with Canada.
Sam | Mar 19, 2008
Makes you wonder how well received the "Fair Tax" would be...
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