Revenue department withholding 2% of some funds from communities

Senator Murphy in a committee hearingDES PLAINES—Communities shouldn’t be expected to bear costs associated with running the state’s tax-collecting body, State Senator Laura Murphy said today as she called for the rollback of unfair fees being charged to local governments.

Murphy introduced Senate Bill 2245 to eliminate the Illinois Department of Revenue’s ability to withhold 2 percent of certain funds it collects from local governments.

“People pay local taxes so they can have local services like police and fire coverage, not so that their money can go into state coffers to prop up the Department of Revenue,” said Murphy, a Des Plaines Democrat. “This is a desperate and unfair money grab by the state, plain and simple.”

Murphy’s legislation affects the Municipal Home Rule Sales Tax, the Municipal Non-Home Rule Sales Tax, and the County Home Rule Sales Tax, among others. This retention is expected to generate about $61 million.

Under current law, the Department of Revenue can use the money it withholds – which it calls “an administrative charge” – to help cover its costs. The department is not using this new fee to provide any additional services.

“The governor has repeatedly tried to slash funding for local governments,” Murphy said. “Rather than taking money from our communities, the governor should find a better way to manage the state agencies under his direction.”
Murphy expects the Senate to take up SB 2245 when the 2018 session begins in January.

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