Illinois’ retailers are against most of the tax proposals being considered in Springfield, but there’s one that they say is OK. Extending sales tax to some services would create a sales tax that more accurately grows with the economy, and that’s good, says Rob Karr, president of the Illinois Retail Merchants Association. “You could apply the sales tax, the state sales tax of 6¼ percent to a variety of services – not a lot of them, but a certain number – lower that rate to 5 percent and still raise about $1½ billion,” he said.
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The retail merchants, however, are against extending the income tax increase, against a proposed increase in the gas tax and against a soda tax that’s been talked about – one cent per ounce for sugary beverages. Karr says the latter two would send people to bordering states, when it’s convenient, to make those purchases.
That gas tax proposal comes from the road construction industry. They want to raise the tax by four cents a gallon, in recognition of the fact that vehicles are more fuel efficient than they were in 1993, the last time the tax was raised, so tax collection is down, while the need for roads is the same.
Karr says the state could pay for its roads by not diverting the money that the motor fuel tax does generate to non-transportation purposes.