Illinois Senate looking at higher sales tax on food, drugs

The mammoth budget blueprint under consideration in the Illinois Senate changed shape yet again Tuesday, with lawmakers floating the idea of applying a higher state sales tax to food and drugs.

The change allows backers to shelve a proposed "opportunity tax" that would charge companies for the "privilege" of doing business in the state. That ran into opposition from business groups. But the broad nature of the sales tax expansion is likely to spawn arguments that it hits hardest those least able to afford the increase.

Some background: the state sales tax on most goods is 6.25 percent. The rate, however, is just 1 percent for many food, drugs and medical supplies — think stuff bought at the grocery store. It's higher in places where local governments can impose their own taxes. In Cook County, for example, shoppers pay an additional 1.25 percent tax to the Regional Transportation Authority for a 2.25 percent total rate.

Here's how the Senate plan would work: The overall sales tax rate of 6.25 percent would drop to 5.75 percent, but it would be applied to a broader range of goods including food, drugs and medical supplies. Cutting the overall sales tax by half a percentage point would drop the total sales tax in Chicago to 9.75 percent. In addition, services would be taxed at 5.75 percent, including car repairs, landscaping, laundry, and cable and satellite.

Read more: http://www.chicagotribune.com/news/local/politics/ct-illinois-senate-budget-taxes-met-0208-20170207-story.html