Washington, DC – Today, the Civic Federation of Chicago released a report assessing the potential impact of the Streamlined Sales and Use Tax Agreement (SSUTA), often referred to as the Internet sales tax, on the state of Illinois. The result of six years of analysis, the Civic Federation’s report is one of the first studies to objectively compare potential revenue and costs from SSUTA.
“It’s time to look this gift horse in the mouth. Supporters of the Streamlined Sales Tax are promising state and local governments billions in new tax revenue under SSUTA, but their claims simply don’t add up,” said Steve DelBianco, executive director of the NetChoice Coalition.
“This report gives a sober assessment of the costs, dislocations, and complexity that would come from the so-called tax simplification. Ironically, the new rules of SSUTA would drain tax revenue away from cities like Chicago who have worked to attract and retain retail and distribution businesses.”
Supporters of SSUTA often cite a University of Tennessee study that estimated state and local governments could collect $55 billion more each year by 2011 from Internet and remote sales taxes. Researchers have since debunked those numbers and estimates are now generally about 1/10 those of the Tennessee study. In fact, the Civic Federation estimated that Illinois governments would take in less than $100 million from Illinois residents who buy from out-of-state catalogs and websites.
The Civic Federation of Chicago is one of the oldest taxpayers’ advocates in the nation, tracing their origins to an 1893 meeting of citizens concerned about corruption in the city of Chicago. Since the 1920’s, the Civic Federation has been a non-partisan watchdog of budgets and taxes in Chicago, and their report should be read with interest by any lawmaker thinking about jumping onto the Internet sales tax bandwagon.
The full text of the Civic Federation report can be found at www.civicfed.org/news.html