March 6, 2008

FOR IMMEDIATE RELEASE

For more information, contact Ibis Antongiorgi, Press Secretary to Cook County Board President Todd H. Stroger, at 312-603-0396 or by email at iantongiorgi@cookcountygov.com.

The Cook County Sales Tax: Basic Facts  

Much of the material published in recent days about the increase in Cook County's portion of the sales tax has not been accurate. The information below is designed to set the record straight and clarify the facts.

March 6, 2008, CHICAGO, IL - Currently, Cook County receives ¾ of 1 cent from the sales tax – three-fourths of a penny per every dollar. The Cook County sales tax has never applied to items that include groceries, medicines and related medical supplies. This rate has remained unchanged for more than 15 years – since the County portion of the sales tax was passed in 1992 under the administration of former County Board President Richard Phelan.

The baseline sales tax across the state is 6.25%, which is collected by the Illinois Department of Revenue. Municipal rates vary. Effective July 1, 2008, the Cook County portion of the sales tax will increase by one cent for a total of 1.75 %.

Sales Tax Breakdown:
State of Illinois:     6.25%
City of Chicago:    1.25% 
Cook County:        .75% (1% increase effective July 1, 2008 for a total of 1.75%)
RTA:                     .75% (.25% increase effective April 1, 2008 for a total of 1%)

How will an increased sales tax affect Cook County residents?

The sales tax WILL AFFECT goods like:

• Fast food
• Restaurant meals
• Alcohol purchased in a tavern
• Clothes shopping
• Furniture
  
  

The sales tax WILL NOT AFFECT “real” or “titled” property like:

• Land, property, home
• Automobiles
• Boats
• Recreational vehicles

(Remember, though, that some of these items may be subject to various municipal sales tax rates.)

The sales tax WILL NOT AFFECT goods like:

• A dozen eggs
• A gallon of milk
• Raw chicken
• A bag of potatoes
• Oxygen tanks
• Syringes
• Prescription drugs
• Over-the-counter drugs
  
  

It’s important to remember that the sales tax increase does NOT apply to all goods, particularly groceries, medicines and medical supplies. On average, households pay less than $158 in Cook County sales tax each year. The proposed increase will affect households, businesses and visitors in proportion to their spending habits and lifestyles.

Collection of new revenue: The State of Illinois collects all sales tax rates imposed by Illinois counties and municipalities. By state statute, the Illinois Department of Revenue limits sales tax rate changes to twice per year, on effective dates of either July 1 or January 1.  Cook County’s ordinance changing the rate must be remitted to IDOR for a July 1st effective date no later than the last day of March. Sales Taxes are imposed upon retailers. This is why it is called the Retailers Occupation Tax. Retailers in turn pass the tax down to their customers.

Retailers remit all sales taxes they have collected during the month of July to the Illinois Department of Revenue (IDOR) on the last day of the month following the month of collection. (July is the first collection month in this example, and August is the remittance month.) September is the allocation month when the IDOR processes all sales tax remittances from all retailers in the state and ‘allocates’ to the governmental entity that is entitled to their portion of the tax. October is the disbursement month when IDOR transmits each governmental entity the specific amount of sales tax that has been remitted by all retailers in Cook County. Thus, Cook County will see the first revenue from the increase in October 2008. Cook County will receive only two months of increased sales tax revenue in our 2008 fiscal year, and 12 months in 2009.

For more information, contact Ibis Antongiorgi, Press Secretary to Cook County Board President Todd H. Stroger, at 312-603-0396 or iantongiorgi@cookcountygov.com. 

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