Illinois Lawmakers Debate Tax Hikes, Mull Scrapping Grocery Tax

Illinois legislators are deep in discussions about raising taxes on businesses as the end of the scheduled session approaches. They are also deliberating on eliminating Illinois' grocery tax and allocating state taxpayer funds to local governments to compensate for potential loss of local revenue.

Last week, Governor J.B. Pritzker's proposed $1 billion in tax hikes faced resistance, leading state agencies to be instructed to brace for $800 million in budget reductions.

Pritzker reiterated his position, stating that it’s up to the legislature to decide on the original budget and any potential changes.

One of the suggested tax hikes involves placing a limit on the discounts that retailers receive for managing tax collection and remittance. State Representative Will Guzzardi, D-Chicago, presented House Bill 5844, which resembles Pritzker's plan but raises the discount percentage while reducing the cap to $500 monthly.

Rob Karr of the Illinois Retail Merchants Association contended that Illinois boasts the highest number of taxable jurisdictions nationwide, posing challenges for retailers in managing the diverse tax rates.

Pritzker also proposed getting rid of the state’s 1% grocery tax without providing an offset for lost revenue to local governments. State Rep. Ryan Spain, R-Peoria, proposed a measure to enable the compensation of lost local revenue with state funds, though the anticipated expense is estimated at $325 million.

State Sen. Don DeWitte, R-St. Charles stated that Republicans are part of the budget negotiations and that it will ultimately come down to a meeting between the governor and the four legislative leaders to finalize the budget package.

Lawmakers are scheduled to conclude their session on May 24th and must pass a balanced budget with simple majorities by May 31st.

Written by Staff Reports

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