Is Chicago Getting A Services Sales Tax?

picture of chicago to acompany blog post about chicago services sales taxIllinois’ motto could be: In Taxes We Trust! Especially in Chicago.

Windy City residents must plunk down extra coin for every picayune convenience, from streaming services like Netflix to rented parking spots. Yet, the state continues to face a crippling pension crisis as it scrounges for new ways to plump state coffers.

The latest fix-it fundraising gambit whisking around government halls is the addition of a Chicago service tax.

Chatter About A Services Tax in Chicago

According to people in the know, Chicago’s mayor, Lori Lightfoot, is mulling over plans to include services in the regional sales tax. Backing her up is the Center for Tax and Budget Accountability.

At the time of this writing, no formal plan has leaked its way into the public sphere. However, rumors persist. Moreover, Lightfoot has said that no plan that passes her desk will hit mom-and-pop services. Instead, she promises that any new service tax would be absorbed by “higher-end services,” like accounting and legal firms.

J.B. Pritzker, the state’s Governor, however, may loathe the idea since he campaigned on a pledge not to add a services sales tax.

Who Will The Chicago Services Tax Hurt?

If service businesses are subjected to a new sales tax, skilled arts and crafts people (e.g., car repair, dance instruction, yachting companies), professional firms (law, accounting), and consultancies (dating services, financial consultants) will feel the pinch most.

Lawyers in the Chicago area, contend that the potential tax is fundamentally regressive in that people use legal services when something unfortunate arises, like eviction, tax disputes, probate proceedings, et cetera.

Moreover, the move could hurt Chicago. Added costs may prompt a mass exodus into the suburbs, which will have a negative domino effect on local eateries and other businesses that cater to professional firms in the city.

Connect with a Chicago Tax Lawyer

Gordon Law Group is an established and respected Chicago tax law firm.

We’ve helped thousands of people overcome tax-related hurdles. Our team knows how to negotiate with IRS agents, and we’ve have built beneficial relationships.

If you’re dealing with a tax matter or simply want to better position yourself to pay less taxes, let’s chat. We have the answers and know-how you need.

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