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Cook Co. board to slash tax on businesses that shop across the border

Cook County Board President Toni Preckwinkle  |  Sun-Times files

Cook County Board President Toni Preckwinkle | Sun-Times files

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Updated: July 19, 2013 6:28AM

The Cook County Board is expected Wednesday to slash a tax that mostly applies to business purchases made outside of the county.

Aides to County Board President Toni Preckwinkle said commissioners will vote on reducing the tax on purchases of non-titled personal property. The rate would be cut to 0.75 percent from 1.25 percent.

The tax applies to sales outside of Cook County for tangible goods such as office supplies and furniture, but not real estate or vehicles. Buyers in Cook County are liable for the tax once their purchases exceed $3,500 per year.

It was instituted in 2012 to capture revenue from deals by Chicago-area companies seeking to avoid the county’s sales tax. It was promoted as part of a “buy local” push to keep business within the county.

But the tax and its reporting requirements drew complaints. At least two lawsuits accuse the county of illegally imposing a value-based tax not authorized by the state Legislature. Preckwinkle has argued the tax falls within the county’s home-rule powers.

The proposed rate of 0.75 percent would match the county’s sales tax rate.

John Carpenter, chief operating officer at the Chicagoland Chamber of Commerce, welcomed the “positive gesture” by Preckwinkle but said the county still lacks the authority to impose the tax. “This makes it just a little bit less illegal,” he said.

Budget Director Andrea Gibson said the partial rollback will cost the county $5 million in its fiscal 2013, which ends in December, and $14 million in fiscal 2014. The tax went into effect April 1.

In another change, those owing the tax would have to report their purchases quarterly instead of monthly starting in December, said a spokeswoman for Preckwinkle.

Ten of the County Board’s 17 commissioners are co-sponsors of the ordinance to lower the tax. They include Democrats and Republicans. Among them is John Daley, a Democrat who chairs the board’s Finance Committee.

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