Grocery Tax of 1% Zeroed Out for One Year
By Greg Bishop | The Center Square
(The Center Square) – Illinois state lawmakers gave themselves more than $485,000 in pay raises as they approved the largest spending plan in state history that includes around $1.8 billion in tax cuts.
It wasn’t until nearly 6 in the morning Saturday, April 9, 2022 that state lawmakers finalized a plan out of both the House and Senate to tax and spend for the coming fiscal year.
The final product, by way of a budget bill, a tax policy bill and a budget implementation bill, spends nearly all of the estimated $46.5 billion in taxpayer revenue.
State Sen. Elgie Sims, D-Chicago, said the bills pay more for the state’s pension debt, and even more than what the governor wanted for a rainy day fund.
“This budget includes a billion dollars into our rainy day funds,” Sims said.
State Sen. Terri Bryant, R-Murphysboro, said the reality is the Democrats’ plan practically spends all the state is bringing in and at record levels.
“I understand what you’re saying we’re going to be spending on,” Bryant said. “I hope that everybody else understands that we’ve increased our spending 30% in eight years.”
During debate, Sims noted there is no language in the budget implementation bill that blocks the cost of living increase for state lawmakers, something that is estimated to cost taxpayers $485,400. That would be about $2,742 extra for lawmakers, if split evenly, though senators get higher pay than representatives.
The budget package includes changes to tax policy. There’s a property tax rebate of up to $300 per household, an income tax rebate of $100 per individual. Teachers are getting double the tax credit, and there’s an earned income tax credit. There will also be a sales tax holiday for back-to-school shopping between Aug. 5-14.
The grocery tax of 1% will be zeroed out for a year and retailers must note that on receipts “to the extent feasible.”
The message on receipts from grocery stores must say “From July 1, 2022 through July 1, 2023, the State of Illinois sales tax on groceries is 0%.” The legislation says “if it is not feasible for the retailer to include the statement on any cash register tape, receipt, invoice, or sales ticket issued to customers, then the retailer shall post the statement on a sign that is clearly visible to customers. The sign shall be no smaller than 4 inches by 8 inches.”
The gas tax increase of around 2.2 cents a gallon that hasn’t kicked in yet, won’t for six months. Fuel retailers must put a sticker noting that or face a $500 daily fine. Te sponsor of the measure, state Rep. Mike Zalewski, D-Riverside, couldn’t provide an estimate on how much it would cost to put such a sticker on every gas pump.
State Rep. Mark Batinick, R-Plainfield, said the sticker isn’t just ethically questionable in an election year, it’s like a comedy sketch show that highlights how much more expensive Illinois’ gas tax is to neighboring states.
“So is the sticker going to say ‘hey, gas is 50 cents more a gallon over here across the border or across the river, it would have been 52.2 cents more, but here’s a sticker to say it’s only 50 cents more,’” Batinick said.
Gov. J.B. Pritzker and legislative Democrats doubled the state’s gas tax in 2019, increasing it from 19 cents a gallon to 38 cents, and added an annual increase tied to inflation. It’s that annual increase that’s been suspended for six months. Illinois is also one of only a few states that assesses its sales tax on top of the gas tax, so motorists in Chicago and elsewhere are paying about 50 cents a gallon in state taxes alone.
Republicans in the minority sought permanent tax relief totaling $2.2 billion. The Democrat majority’s approved plan has around $1.8 billion in tax relief.
The package is now poised to be sent to the governor. The next fiscal year begins July 1.
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