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Local (Sales Tax) Matters: Drive a Few Miles, Save a Few Bucks

Did you know that just crossing the street could earn you a lower sales tax? Here's a guide to local sales tax rates.

Did you know that it’s less expensive to shop at the Walgreens at 47th & Willow Springs than the Walgreens a mile south of there on Joliet Rd?  If you’re buying anything except drugs or food, the Western Springs Walgreens is 1% cheaper than the one in Indian Head Park. 

No, it’s not due to prices but rather sales tax.  In their wisdom, our General Assembly has given villages the ability to add to the state- and county-level sales tax with their own municipal-level sales tax.  The state sales tax is high enough at 6.25%, and Cook County tosses another 1.75% on top of that (1% for the RTA and 0.75% for the County), bringing the total to 8%, and then Indian Head Park adds another 1% on top of that to come up with a 9% sales tax. 

The table at the top of this column lays out the various sales tax rates for our areas.  Along with Westchester, Indian Head Park has the highest rate in the area.   The prize for the lowest rate, 8%, goes to Western Springs and Hodgkins, with the remaining municipalities coming in between 8% and 9%. 

Hodgkins’ main shopping district is, of course, the Quarry, with its Walmart and Target.  So, if you see the same $500 computer advertised at both Walmart and nearby Best Buy in Countryside Plaza, you will save $3.75 by purchasing it at Walmart ($500 * .0075).  No, not a whole lot of money, but still . . .

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As mentioned, the rates I’m quoting are for non-food, non-drug merchandise.  The sales tax for food and drugs is a uniform 2.25% (except, that is, street drugs, for which you will rarely be charged sales tax).  In addition to street drugs, we find that magazines, comic books, and services (e.g. a hair cut) are all sales tax exempt.  Vehicles are a uniform 7.5%. 
 
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One of the things I dislike about the sales tax is that it is regressive, that is lower-income households spend a larger share of their income than do wealthier households, and so sales tax hits lower-income households proportionally harder.  For all our politicians’ professed caring for the not-as-well-off, they certainly don’t seem to hesitate to wallop these folks with huge 9% tax rates.  And, yes, Indian Head Park and Westchester’s sales tax rates are among the highest in the nation.  Chicago’s is only slightly higher at 9.25%.  With the exception of a Navajo reservation in Arizona at 13.725%, the highest local sales tax rates seem to run around 10% (e.g. Birmingham, Alabama). 

Lowest rates?  Delaware, New Hampshire, and Oregon all manage to get by with absolutely no sales tax at all.  But there are trade-offs: Oregon may have no sales tax but it does boast high income taxes.  On the other hand, neighboring Washington State has high sales taxes (up to 9.5%) but no income tax.  And, of course, here in Illinois we are blessed with both high sales taxes and high income taxes – and, despite all that, we have worst credit rating of any state in the union.

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So, in closing, where you purchase your big-ticket item – washing machine, TV, computer – can make a big difference; and it can pays to shop around not only for the best purchase price, but the lowest sales tax rate. 

And we all might want to think about tossing out the incumbents in our state legislature – you know, the ones who’ve driven Illinois into near-insolvency despite having some of the highest taxes in the country.  I would start with Michael Madigan, who has been the Speaker of the Illinois General Assembly for some 30 years now.  It seems to me that, more than any other person, Mr. Madigan is responsible for the reprehensible state of our state.

But that’s a topic for another column.

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