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Wednesday, June 4, 2025

Illinois faces potential challenges with proposed service tax implementation

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State Representative Michael Coffey (IL) | Representative Michael J. Coffey, Jr. (R) 95th District

State Representative Michael Coffey (IL) | Representative Michael J. Coffey, Jr. (R) 95th District

If a service tax is implemented by the Democrats, it could have significant effects on families across Illinois. The proposed tax would cover over 80 services, including haircuts, TV streaming services, campgrounds, golf, vehicle repair, photography, landscaping, pet grooming, shoe repair, farm implements, and grain storage.

At a rate of 6.25%, Illinois would surpass West Virginia's 6% to hold the highest statewide rate applied to such a broad range of services in the United States. With more than 73% of Illinois' economy being service-producing industries that are not currently set up to pay sales tax, this change could lead many businesses to reconsider operating in the state.

Critics argue that these progressive policies increase costs and control over people's lives. They claim that the majority party is either unaware or indifferent to how these policies drive families and businesses out of Illinois. Concerns are also raised about the burden this tax would place on consumers and its disproportionate impact on service-based small businesses and startups.

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