Quid Pro Quo Sales Tax Increases in Illinois
- Sales Tax Rate Changes
- Sep 23, 2015 | Gail Cole
In an unusual case of quid pro quo, councils in both Normal and Bloomington, Illinois, decided to increase home rule sales taxes from 1.5% to 2.5%, which will bring the combined local rates to 8.75%. Adjacent Bloomington and Normal comprise the Bloomington-Normal metropolitan area.
During a summer retreat, the Normal Town Council proposed a 1% sales tax rate increase that “would be contingent on Bloomington also raising its sales tax.” Given the close proximity of the two localities, there are obvious benefits to increasing and reducing sales tax rates simultaneously. The rate increase was further discussed and approved during a September 8 meeting (see Agenda), and the rate change is now posted on the Bloomington website.
Earlier this week, the Bloomington City Council approved a similar rate increase. According to Alderman David Sage, who chairs the Budget Task Force, “This is not an 11th hour that we’ve made. This is an 11th hour that Normal has made for us.” Exactly how the Bloomington sales tax revenue will be distributed has yet to be decided.
If both Normal and Bloomington can file the required paperwork with the state by October 1, the rate increases will take effect on January 1, 2016. If not, they’ll be pushed back to July 1, 2016. Together, the additional taxes are expected to raise as much as $15.5 million annually.
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