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Cook business use tax thwarted again; county to appeal ruling

October 11, 2013
A temporary injunction imposed in July against Cook County collecting a 0.75 use tax on big-ticket items purchased outside the county became permanent Oct. 8, when the judge was asked to reconsider the matter.
The ruling came two days before Cook County Board President Toni Preckwinkle was set to unveil her 2014 budget, one which she had said would include “no taxes, no fines, no fees, no increases.”
Preckwinkle spokesman Owen Kilmer said he did not immediately know what the financial hit would be to the county if the tax cannot be collected again. Because the judge already had issued a temporary injunction, county officials were not counting on a great deal of revenue from the tax this year.
Nevertheless, Preckwinkle’s office said she would appeal the ruling of Cook County Circuit Judge Robert Lopez Cepero. The use tax would target individuals and companies based in the county who go elsewhere to save money on large expenses such as office supplies or equipment worth more than $3,500. Real estate and vehicle purchases would be exempt.
Billed by county officials as the Buy Local Tax, the charge is an attempt to help Cook County businesses by closing a loophole that enables purchasers of personal property to buy outside the county and avoid paying county sales taxes. Instead, the tax has riled business.
Attorney Michael Wynne, who represented the Chicagoland Chamber of Commerce in its lawsuit challenging the use tax, called it “a very invasive tax.”
The use tax on so-called “non-titled personal property” was first imposed in April at a rate of 1.25 percent. Cook County commissioners in June cut the rate to 0.75 percent, a move Preckwinkle hoped would bring it into line with federal tax rules and bolster the county’s case in court.
The latest revenue generator resembles a 1 percent use tax that Chicago has levied since 1992. But more onerous than the city’s levy, which gets settled once a year, the county tax would have to be paid monthly.