Chicago, Cook County Businesses Fear Taxes to Come

Published December 1, 2007

News that Cook County, Illinois may more than triple its sales tax, and add more taxes after that, has rattled businesspeople throughout Chicago and the surrounding county area.

If approved, the sales tax hike would give Chicago a rate of 11 percent, believed to be the highest in the nation.

“I can’t imagine having the highest sales tax in the nation would be good for anyone,” said Rob Karr, vice president of government and member relations at the Illinois Retail Merchants Association.

Karr said such a high sales tax would give people more reasons to do business outside Chicago and Cook County. It also would raise costs for shoppers who continue doing business in the city and county.

Even Higher Tax Possible

Chicago’s sales tax could go higher still if state lawmakers follow through on a proposal to hike the regional transit sales tax.

That plan calls for doubling the transit sales tax in Cook County from 0.25 percent to 0.50 percent and tripling the transit sales tax in suburban Cook and five other suburban counties to 0.75 percent.

Cook County Commissioner William Beavers (D) also has proposed tax hikes on telephone service (wireless and landline) and utility services.

County Board leaders delayed an October 1 vote on the sales tax hike after it became clear the measure would be defeated, and they have not scheduled a hearing for Beavers’ tax hike proposals.

Mag Mile Fears Harm

All this talk of higher sales taxes worries John Maxson, president of the Greater North Michigan Avenue Association. The organization represents 740 members, including some of the city’s premiere hotels, restaurants, and retailers in an area known as the Magnificent Mile.

“We feel this is another step to disadvantage a generous economic engine that has helped fuel Chicago and Cook County over the years,” Maxson said. “We compete with other venues around the country like Orlando, Las Vegas, and streets where communities have invested in a premiere hospitality and retail venue like ours. We also compete with shopping malls outside Cook County borders.

“Once word gets out this is the highest-taxed area, it will be detrimental, particularly to attracting big conventions,” Maxson said. “When you’re spending millions of dollars in Chicago on destination-related things, the tax makes a big difference.”

Steve Stanek