 Most candy -- currently
carrying a 1 percent sales tax -- will be taxed at 6.25 percent. And
it'll be the same for shampoos and toothpaste that until now were
taxed at the lower rate if shopkeepers deemed they had a medicinal
effect.
Bottled soft drinks with added sweetener or flavoring, such as iced
tea, will be taxed more, just like soda pop is now. And liquor
distributors will pay more for alcohol. That cost invariably will be
passed on to consumers.
All told, the changes should raise about $150 million a year toward
a $30 billion building plan for roads and schools. The program also
includes hundreds of millions of dollars for local pet projects of
lawmakers. Gov. Pat Quinn also approved hikes in the cost of
driver's licenses and plates and OK’d video poker in places such as
taverns to increase revenue -- scheduled to bring in $600 million
more annually -- to pay for what officeholders said was a
long-overdue plan to put people to work and improve the state's
infrastructure.
"Most retailers are in a position of saying we need a capital bill.
This was part of a way to get it, and so we're living with it," said
David Vite of the Illinois Retail Merchants Association.
Most of the sales-tax changes attempt to streamline the system.
While food and drugs have been taxed at 1 percent for the past
quarter-century, some products -- a dandruff shampoo or a
sensitivity-reducing toothpaste, for example -- have qualified for
the lower rate, but that is changing.
"The marketing information on the outside of the box will not
determine its tax rate," Illinois Revenue Department spokeswoman
Susan Hofer said. "If you buy shampoo, you pay the general sales tax
rate."
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Lawmakers used definitions from a national sales-tax streamlining
project. But that definition is still sticky when it comes to candy.
Until now, candy has been taxed as food, but it will go to the
higher rate -- unless it has flour or needs refrigeration. Critics
have questioned why licorice, which contains flour, should be exempt
from higher sales tax.
In many communities, the sales tax is higher because local
governments impose their own tariff on purchases.
Liquor excise taxes, paid by distributors but undoubtedly picked up
by consumers, will increase as well.
They equate to a 2.6-cents increase on a six-pack of beer, 13
cents on a bottle of wine and 81 cents for a fifth of liquor.
One prominent distributor, a company controlled by Chicago
Blackhawks owner Rocky Wirtz, filed a Cook County lawsuit last week
to stop the tax. His company claims the law unfairly singles out
distilled spirits, applying a heavier share of the tax increase on
hard liquor than on beer and wine.
A hearing is scheduled for Wednesday.
[Associated Press; By JOHN O'CONNOR]
John O'Connor is an AP political writer.
Copyright 2009 The Associated Press. All rights reserved. This
material may not be published, broadcast, rewritten or
redistributed.
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