Cook County Board President Toni Preckwinkle on Tuesday defended her controversial tax on big-ticket items purchased outside the county, which is now the target of a lawsuit by a powerful Chicago business group.
The so-called use tax applies to goods worth more than $3,500 that are used by Cook County residents and businesses, but were bought outside of the County. In a lawsuit filed late last week, the Chicagoland Chamber of Commerce argues the use tax violates the Illinois Constitution and state law.
But on Tuesday, Preckwinkle argued the County Board recently lowered the use tax rate - to .75 percent from 1.25 percent - in order to allay legal concerns.
“Frankly, we took action at the last board meeting to remove one of those grounds, and we think we have a strong case,” Preckwinkle said of last week’s vote. “We’ll see what the courts decide.”
Preckwinkle’s administration expects about $13.8 million in revenue this year from the new use tax, which took effect April 1. During budget negotiations, the county president sold the tax as a way to encourage Cook County residents and companies to buy from local businesses. It doesn’t apply to titled property like automobiles.
But the move irked many businesses who make big purchases outside of Cook County to circumvent high sales taxes.
Preckwinkle said the tax will ultimately benefit Cook County’s business climate.
“The city has had a use tax forever,” she said. “I mean, I was an alderman for 19 years. The city had a use tax.”
Last week’s rollback of the use tax rate means the county will lose out on about $5 million in revenue this year, according to county spokeswoman Kristen Mack.
For 2014, the county expected to bring in $25.6 million in revenue from the tax, but that’s now been dropped to just $11.7 million.
Alex Keefe covers politics for WBEZ. Follow him @akeefe.