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Cook County tax hike will bite consumers, businesses
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The Southtown Star
June
30, 2008
By Mike Nolan, Staff writer
Come Tuesday, Chicago will have the highest sales tax rate
of any big city in the nation, and Keith Kujawa is already thinking
about how he could save money.
For one, he could move.
Kujawa drives from Chicago to his job in Frankfort, but high
gas prices are making him consider taking the train, then riding
a bike the rest of the way. Kujawa said the new tax hike might
be the tipping point as to whether he'll stick around the area.
"It's quite scary knowing that I may not be able to live
in the state because of the rise of taxes and the cost of living
going up and up," Kujawa, 35, said while shopping in Tinley
Park last week.
With Cook County's sales tax rate climbing a percentage point,
to 9 percent, that will push Chicago's tax on general merchandise
to 10.25 percent. Shoppers in Country Club Hills will pay the
same amount.
Depending on where they shop in Tinley Park, consumers will
see a tax gap of two percentage points. Stores in the Cook County
portion of the village will collect 9 percent, while those in
Will County remain at 7 percent.
On small purchases, the difference might not be that noticeable,
but when buying large items like a refrigerator or big-screen
TV, the tax disparity might be enough to drive shoppers to Will
County or Lake County, Ind., which has a flat 7 percent rate.
Larry Rogers, who lives in Homer Glen, said he doesn't buy much
in Cook County, and the jump in the tax rate will further curb
his trips across the border.
"I will shop less in Cook County because everything I need
I can find in Will County," he said.
Worried merchants
That more shoppers might do the same worries Lisa Ziegler, president
of the Chicago Southland Chamber of Commerce. She's concerned
that some locally owned businesses, particularly those selling
big-ticket items, might go under or move out of the county.
Not only are small businesses having to contend with higher
prices for energy and commodities, they're also facing a slowdown
in the economy, Ziegler said.
"Everything is increasing (in price)," she said. "It's
a difficult time."
Ziegler said she doesn't know whether businesses can trim their
prices to offset the higher tax.
"What can you do? That's the unfortunate part," she
said.
A big commercial developer in Tinley Park thinks it can make
the tax disparity work to its advantage. To promote a business
park it's building in Mokena, TCB Development recently sent
letters to firms in south Cook County highlighting the difference
in tax rates.
Noting the increase in the sales tax rate, the letter asks "can
you, your business and your customers continue to afford bearing
these taxes?" and warns that staying in Cook County "could
result in a significant loss of your business."
Mokena officials didn't have a hand in sending out the letter,
nor are they knocking at the doors of Cook County businesses
urging them to pick up and move, said Marty Lucas, Mokena's
economic development coordinator.
"We are always aggressively marketing ourselves, and we
do feel we have a lot to offer," he said.
Having a sales tax rate that's a couple of percentage points
lower than some of its Cook County neighbors could help businesses
in Mokena and elsewhere in Will County, Lucas said.
"This (tax gap) does give Will County businesses a bit
of a real edge," he said.
'The bite is the bite'
Some businesspeople said they feel there's little they can do
to soften the tax blow.
"There's not a whole lot we can do to offset it,"
said Greg Joutras, general manager of Laurel Jaguar, Volvo,
Land Rover and Audi in Tinley Park. "It's a pretty tough
time to be (raising the tax)."
For vehicle purchases, sales tax is calculated based on which
county the car is registered in.
While buyers of the vehicles his dealership on 159th Street
sells tend to be more affluent, that doesn't mean the higher
tax bill doesn't impact them, Joutras said.
"The (tax) bite is the bite," he said. "It's
not an easier pill to swallow, and not everybody we sell cars
to is in an upper-income bracket."
He's not selling cars costing tens of thousands of dollars,
but Rob Grill is feeling the heat from higher sales tax rates.
A co-owner of Ace Hardware stores in Illinois and Indiana, Grill
sees his south Cook County customers going to his stores in
Dyer, Ind., and Munster, Ind., for big-ticket items, such as
lawn mowers and snow blowers. The trend will continue as the
tax rate for his Lansing store rises to 9.5 percent Tuesday,
while rates for his Indiana stores remain at 7 percent, Grill
said.
His Lansing store still stocks mowers and snow blowers and grills,
but "they don't sell like they used to, and we don't carry
the quantities (of those items) that we used to," he said.
