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Judge halts, temporarily, Cook Co. tax on purchases beyond county’s border

Toni Preckwinkle | File photo

Toni Preckwinkle | File photo

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Updated: July 25, 2013 7:42PM

A circuit court judge has ordered Cook County to stop enforcing, at least temporarily, a tax on purchases made outside the county.

Cook County Circuit Court Judge Robert Lopez Cepero on Wednesday granted a preliminary injunction against the tax, according to a county spokesman and the attorney representing the Chicagoland Chamber of Commerce.

Owen Kilmer, a county spokesman, said the county is consulting with the department of revenue and the state’s attorney’s office “to determine how we manage during and throughout the preliminary injunction.”

Kilmer said the county is not considering dumping the tax and will “vigorously” defend it.

But Michael Wynne, the attorney representing the chamber of commerce in a lawsuit filed against the county, hopes the county reconsiders.

“I think the judge has recognized there are significant weakness with the county’s ordinance,” Wynne said, later adding: “I’m hoping the county will take a serious look at alternatives other than trying to resuscitate the tax.”

The tax applies to purchases made outside of Cook County for tangible goods such as office supplies and furniture that are used in Cook County. But the tax does not include 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. Cook County Board President Toni Preckwinkle has argued the tax falls within the county’s home-rule powers.

The Cook County Board reduced the tax from 1.25 percent to 0.75 percent in June.

The reduced rate matches the county’s sales tax rate. County officials said the partial rollback answers a legal challenge that differential tax rates violate the U.S. Constitution.

As for budget concerns, Kilmer said, “It’s far too early to say how this will impact our budget.”

Contributing: David Roeder

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