TAX NEWS - JUNE 2010

Illinois Tax: Tax holiday offers break

05 June 2010 -- To Memorial Day, Independence Day and Labor Day, Illinois state legislators have added another summertime holiday.

Sort of.

Before they adjourned late last month, lawmakers voted to create a sales tax holiday in August. Ever hear of one of those?

If Gov. Pat Quinn signs the legislation, parents, guardians and others who need to buy school supplies and clothing for students before the start of the fall semester can celebrate the new holiday from Aug. 6 to Aug. 15.

The 10-day sales tax holiday would lower the state sales tax from 6.25 percent to 1.25 percent. Local sales taxes still apply.

The sales tax holiday isn't a new idea. For years, Iowa and Missouri have had sales tax holidays in August for the purchase of school supplies and clothing. In fact, some western Illinois parents travel to those states to reap the tax savings, at the expense of merchants on our side of the Mississippi River.

If you can't beat 'em, why not join 'em?

The bill that lawmakers passed started out as a Senate bill, approved unanimously, that would have allowed tax credits to owners who rehab buildings more than 20 years old in enterprise zones and other specified areas. The House took that bill, completely rewrote it into a school sales tax holiday bill and passed it, 65-51. Senators, handed the unrecognizable legislation for their concurrence, thought about it a while and decided, sure, they'd approve it, too. The final vote was 42-8.

Area legislators voted with their parties. Sens. Pam Althoff, R-McHenry, and Dan Duffy, R-Barrington, voted against it, as did Reps. Mike Tryon, R-Crystal Lake, and Mark Beaubien, R-Waukegan. Rep. Jack Franks, D-Marengo, voted for the amended bill.

While taxpayers will appreciate the brief sales tax break, they still understand that the General Assembly and governor did little to solve the state's fiscal crisis.

Is that good governance?

That will be up to voters to decide Nov. 2.