1995-69RESOLUTION NO. 95- 69
A RESOLUTION REQUESTING DEFERRAL OF THE IMPLEMENTATION OF THE
COOK COUNTY AUTOMOBILE SALES TAX
WHEREAS, the Village of Buffalo Grove is a Home Rule Unit of government
under the Illinois Constitution of 1970 located in Cook and Lake Counties,
Illinois; and
WHEREAS, Article VII, Section 10, of the Constitution of the State of
Illinois, and Chapter 5 ILKS, paragraphs 220/1 through 220/8, of the Illinois
Compiled Statutes, authorize and encourage intergovernmental association and
cooperation; and
WHEREAS, the County of Cook in 1992 passed but did not implement an
increase in the automobile use tax by 3/4%; and
WHEREAS, the County of Cook is now considering implementing a tax as part
of its 1996 budget; and
WHEREAS, the Village of Buffalo Grove has concerns that the procedures
established for collecting such tax may result in widespread non - compliance with
the law and may encourage not only Cook County residents but residents of
surrounding areas to purchase vehicles outside of the County; and
WHEREAS, the resulting loss in sales could have a substantial impact on the
collection of not only the County's use taxes but on municipal sales taxes and
could negatively impact Cook County automobile dealers.
NOW, THEREFORE, BE IT RESOLVED BY THE PRESIDENT AND BOARD OF TRUSTEES OF
THE VILLAGE OF BUFFALO GROVE, COOK AND LAKE COUNTIES, ILLINOIS, that:
Section 1. The County of Cook is requested to consider postponing the
implementation of the collection plan for the County Use Tax until a more
effective and equitable method of implementation, assessment and
collection is devised.
Section 2. The Village Clerk is directed to file a copy of this
Resolution with the President and members of the Cook County Board upon
passage and approval as an expression of the Village's position on this
matter.
AYES: 6 - Marienthal Reid, Rubin, Braiman, Hendricks, Glover
NAPES: 0 - None
ABSENT: 0 - None
PASSED: November 20 , 1995.APPROVED: November 20 ,1995
t,►) LA, c,�
' Village Clerk AV
11/16 '95 10:55 i D O NGTON TOYOTA , FAX : 708 -39 0363 PAGE
Tax may drive buyers out of Cook
ar- buying is about to be
thrown into turmoil in Jim MIAO)a
Chicagoland. AUTO WRITER
Starting Dec. 1. Cook
County residents will
begin paying a % percent use tax
when they buy new and used
vehicles in Cook County. The tax `
has been on the books since 1992, S 4
but never collected on vehicle 1i , i i
purchases until now. '
Those who live in I.ake or County.
DuPage or Will or another county CATA says this isn't exactly
will be able to buy a car from a equitable. y
Cook County dealership without
having to pay the % percent tax. What this means is that dealers
And those who five in Cook outside Cook County will start
County can travel to Lake or promoting "drive out and save
DuPage or Will or whatever money" campaigns, like they did
county and avoid the % percent with the Chicago tax before 1982.
1 tax— perhaps. With the average price of a new
The Chicago Automobile Trade car at about $ao,000, the savings
Association, which represents by avoiding a % percent tax
more than 750 Chicagoland new, would be around $150, a fairly
car dealers, isn't happy with that good reason to hop in the old
arrangement jalopy and wend your way into
"When the City of Chicago another county to purchase a
Implemented its Infamous l per- vehicle. Even if you pay a couple
cent sales tax (in 1861), there were of 40 cent tolls, you'll be money
numerous negative eonMuencee: ahead.
said Pat Fitzgibbon, the associa- "People cross the street to save
tion chairman and a Dodge decker $W: how far do you think they n
in South Rolland in Cook County, go to save $20" said Jerry Cizek,
-'That tax encouraged Chicago CATA president.
residents to shop outside the city The association, according to
limit# for many 'big- ticket' items Cizek. wants the state to enact
in order to take advantage of the legislation so the Cook County
sales tax differential," he said. rUldent who travels to Lake
"Chicago retailers, especially County to buy a car will be
new -car and truck dealers, liter- charged the % percent use tax,
ally took a beating," Fitzgibbon and the Lake County dealer will
said. and several closed their be required to send the money to
doors. "It Isn't a stretch of logic to the Department of Revenue for
project that any Increase In the disbursement to Cook County.
Cook County tax will result in a If buyers flee Cook County for
significant decline In the number Lake or DuNge or Will Counties,
of dealerships in the county," there will be little if any gain in
The fact that buyers fled Chi- revenue for Cook County, Cizek
cago fir the %urbs to avoid the f said.
percent city tax prompted legisia- Cizek points out, for example,
Lion in 1992 that required collar that the high taxes on a gallon of
county dealers to collect the City gas or a quart of booze in Chicago
of Chicago tax Dom Chicago rest- results In visitors filling their
dents buying a .vehicle in the sub - tanks or liquor cabinets in a cot.
urbs. The dealers remitted the in lar county where the tax is lower.
to the Illinois Department of Rev - The % percent tax will do the
enue, which themdisbursed the same when it Comes to cars. he
Tung to Chicago. said —send buyers to the collar
So what It all comes down to Is`-, counties to save some money.
,�t t etiiective Dec. 1. if you live in '._ V collar counties collected the
ook County and buy a car in tax, there would be no incentive
o0k County, you will pay an for Cook County residents to leave
ittonal y. percent tax. U you the county to buy a cor. ' Cizek
tY�uein Cook County but buy a car , said.
Lake County, you will not pay Without collar counties collect.
added !'• percent tax, and u % ing the tax, there could be Some
live In Lake County but buy d shenanigans, Cizek said, such as a
In Cook County. you won't .' dealer with a store in both Cook
to pay the tax because It is a and Lake Counties selling the car
We tax, and Lake County real- at his Cook County store but
,dens 0on't " and °'use".I Cook delivering it at his Lake County
store. Or a Cook County dealer
could sell the car at his Cook
County store but deliver it to the
customer at a Aenny's restaurant
in Lake County.
"Currently there is no provision
in the taw for the coltectton of the
Cook County taut in the collar
counties," Cizek said - "We're ask.
ing for that provision."
CATA also has urged Cook
County Board President John
5troger and the board's commis.
sioners to delay implementing the
collection of the tax until legisla-
tion can be enacted to establish
collar county collection.
Barbara Bruno. Cook County
director of revenue. said she sym.
pathizes with Cook County deal-
ers.
"We don't Want to create a
hardship for anyone. We've passed
a resolution appealing to the Illi-
nois legislature to collect the tax
for us," which means having deal-
ers outside Cook County collect
the tax and send it to the Depart-
ment of Revenue to disperse, just
as CATA wants.
"But until the legislature acts,
there is nothing we can do, and
we are poised to start collecting
the tax Dec. l," she said.
So no delay is planned.
But. she insists, some of the
dealers' fears may be unfounded,
She said even though collar,
county dealers won't be empow, . .
ered to collect the tax, her office
will send letters to Cook County
residents who buy a vehicle out-
side the county informing them
that they owe the added % percent
use tax.
Quit said checking registra.
tions and then making a mailing
could take several weeks and
many consumers will refuse to
send the county a check voluntar-
Uy. And don't be surprised if a
few letters come back to the
county unopened and marked
"return to sender,"
As for dealers outside Cook
County trying to lure buyers to
their stores to beat the tax, Bruno
sold because her Mee will be
sending out letters informing con.
sumers they owe the tax. any
dealer advertising that a customer
can escape the tithe will be sub-
ject to investigation by the state's
attorney's offtee fbr false advertis
ing
Cizek argues, however. that any
Lake County dealer could simply
advertise that "'Our tax rate Is 6.5
percent' and it couldn't be Consid•
ered misleading or deceptive."
NOV -16 -1995 09:59 708 394 0363 94% P.02
AXI. (B)
TO: William R. Balling
FROM: William H. Brimm
DATE: November 15, 1995
SUBJECT: Cook County Automobile Use Tax
Attached, please find a Resolution for review, comment and consideration by the
President and Board of Trustees regarding the deferral of the County of Cook's
Use Tax of 3/4% on the sale of automobiles and other licenses vehicles in the
County. This tax is authorized under the County's Home Rule powers and would be
assessed only in the County, collected at the point of sale and remitted by each
dealer to the County. As with other sales type taxes, the Illinois Department
of Revenue will not participate in the collection and distribution of the sales
based tax.
The Village's three automobile dealers are located in Cook County and provide
significant levels of sales taxes to the Village. For the accounting period
ended June 30, 1995, the Village realized $882,864.08 in local sales taxes
generated within Cook County under the category "Automotive and Filling
Stations ". While the use would include the several service stations along Dundee
Road, it is assumed that the majority of the receipts were generated by the three
local dealers. The potential for sales being diverted to the collar counties is
significant with the proposed tax adding nearly one percent to the cost of a
vehicle and the concurrent loss of local sales tax dollars would have an adverse
fiscal impact although this cannot be estimated with any degree of accuracy, if
at all.
The Northwest Municipal Conference has gone on record with a Resolution dated
November 8, 1995 requesting that the County postpone implementation of the tax
collection plan. The local Resolution requests similar consideration and is
recommended for approval.
M
William H. Brimm