Taxing Consumer Services Could Help Illinois’s Revenue

May 21, 2015

Two tax policy organizations with distinct views released a joint report about Illinois revenue. 

Credit Flickr user Parker Knight / "Chopperz 10" (CC BY 2.0)

It outlines how taxing services, such as haircuts and pet grooming, could generate up to two point one billion dollars in new annual revenue.

Ralph Martire, who is from the Center for Tax and Budget Accountability, says Illinois has one of the most narrow tax bases in the country.

"The Illinois sales tax applies pretty much just to the sale of products and misses services, and this is one of the real reasons why our sales tax doesn't function and--and frankly doesn't comport with the modern economy." 

Republican Governor Bruce Rauner discussed during his campaign the possibility of taxing some services. However, there has been no movement in the legislature to pass a sales tax on services, even as lawmakers work to bridge a 6 billion dollar shortfall in the 2016 budget.