 The Illinois Supreme Court ruled Jan. 20 it’s unconstitutional for the city of
Chicago to collect taxes from suburban rental car companies.
In 2011, Chicago extended an 8 percent tax on leased personal property to
include rental cars within 3 miles of the city limits if city residents were
renting those vehicles. Rental car companies Enterprise and Hertz sued the city
that same year, and a Cook County Circuit Court ruled in their favor, saying the
city had overstepped its authority. But in 2015, an Illinois Appellate Court
reversed the Cook County Circuit Court’s decision, saying the city had the
authority to impose the tax based on the assumption that the vehicle would be
primarily used in the city.
Hertz and Enterprise argued in their appeal to the Illinois Supreme Court that
it would be chaotic if other Illinois cities tried to impose similar taxes
outside their borders. And in the Supreme Court’s ruling in their favor, it said
“Given the number of local governmental units, particularly in the Chicago area
… unrestrained extraterritorial exercise of the powers of taxation and zoning
and in other areas could create serious problems.”
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With sky-high property taxes and more than 30 other taxes and fees
in the city, Chicago politicians haven’t shown the ability to think
of many other solutions to the city’s fiscal problems except to tax
their own residents – and to make sneaky cash grabs into the
suburbs. But instead of nickel-and-dime schemes pushing residents
out of the increasingly unaffordable city, Chicago City Council
should enact serious economic reforms – most notably pension reform
– to avoid bankruptcy and help struggling taxpayers and businesses.
Politicians have already slammed Chicagoans with the highest tax
burden in the state, and it’s increasing constantly. Chasing down
these same city residents to tax their suburban transactions is
unfair and irresponsible.
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