Cap on retailers’ reimbursement $1,000 a month


Illinois Governor J.B. Pritzker. (Photo by Joshua Lott/Getty Images)

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SPRINGFIELD, Ill. (AP) _ Gov. J.B. Pritzker plans to raise $75 million for his proposed budget by capping the amount of money retailers can keep for collecting sales tax for the state.

He also said Wednesday he wants to impose a 5-cent plastic bag fee.

Retailers may keep 1.75 percent of the money they collect from the state’s 6.25 percent sales tax. Pritzker would cap that at $1,000 per month. The Illinois Retail Merchants Association is concerned about it.

Pritzker spokeswoman Jordan Abudayyeh (a-boo-DAY’-uh) says the majority of retailers would see no reduction in discount. She says taxable retail sales are concentrated among a relatively small number of high-volume stores.

Pritzker says a plastic bag tax would raise $20 million for the state. Chicago has a 7-cent bag tax. Retailers there keep 2 cents of that.


3:55 p.m.

Gov. J.B. Pritzker’s plan to cap the amount retailers can keep as reimbursement for collecting state sales tax is meeting opposition from their advocates.

Pritzker’s $39 billion budget unveiled Wednesday includes $75 million in new revenue from capping the so-called retailers’ discount. That’s the 1.75 percent retailers keep as reimbursement for collecting the state’s 6.25 percent saes tax.

Rob Karr is president and CEO of the Illinois Retail Merchants Association. He says the current discount doesn’t cover the cost of processing sales tax paid electronically. He says 80 percent of purchases are now electronic. Processing fees outstrip revenue from the discount.

Pritzker’s office did not immediately indicate the amount of the proposed cap.


3:10 p.m.

Gov. J.B. Pritzker is proposing a 32-cents-per-pack hike in the state’s cigarette tax.

The proposal is part of the Democrat’s $39 billion budget unveiled Wednesday.

The state tax on cigarettes is currently $1.98 per pack. It was last raised by $1 in 2012.

Kathy Drea (DRAY’-uh) is vice president of the American Lung Association of Illinois. She says Pritzker is also proposing taxing e-cigarettes at the same rate as other tobacco products, which is a wholesale rate of 36 percent.

He predicts the tax increases would produce $65 million in new revenue.

Democratic Sen. Terry Link of Waukegan is sponsoring legislation to allow the e-cigarette tax .


2:45 p.m.

The Illinois Senate’s Republican leader is skeptical about Gov. J.B. Pritzker’s state budget proposal.

Sen. Bill Brady of Bloomington says the Democratic governor used Wednesday’s budget address to promote “more spending, more tax increases.”

Brady says he has “grave concerns” about Pritzker’s plan to handle the state’s obligation to fund its pensions. They have a $134 billion shortfall. Pritzker proposes borrowing $2 billion, selling state assets, stretching the payment schedule and using money from a progressive income tax to pump billions of dollars extra into the debt.

Other money for pensions would come from Pritzker’s proposed graduated income tax. Brady says he opposes that too.

Voters would have to approve that no earlier than November 2020.


12:40 p.m.

Gov. JB. Pritzker is proposing raising more than $1 billion in state revenue by legalizing recreational marijuana and sports betting.

The Democrat is delivering his plan for a $39 billion budget for the fiscal year that begins July 1.

He says it focuses on spending for education, health and human services, and public safety.

Pritzker campaigned on legalizing marijuana and on Wednesday called for legalized sports better. He also wants a tax on insurance companies.

The governor also wants to reform the income tax system with a graduated tax based on income. Voters would have to approve that in 2020.


12:20 p.m.

Gov. J.B. Pritzker says he is proposing an `honest budget’ proposal.

The Democrat told a joint session of the General Assembly Wednesday that the “costs are not hidden, the revenues I propose are not out of reach.”

But Pritzker says the state faces a $3.2 billion deficit in the budget that begins July 1. And he reminded his audience that the state has a $15 billion pile of overdue bills.

Pritzker began his speech with a moment of silence for those killed and wounded in the Aurora warehouse shooting last Friday.


4:45 a.m.

Illinois Gov. J.B. Pritzker is scheduled to unveil his first annual budget proposal amid an estimated $3.2 billion deficit.

The Democrat will address a joint session of the General Assembly on Wednesday with his plans for state spending in the fiscal year that begins July 1.

His administration this month estimated that without action, the state could be in a $3 billion hole in the spring of 2020.

Pritzker campaigned on a progressive income tax and legalizing recreational marijuana . But the graduated income tax would have to be voted on and that couldn’t happen until 2020.

Legalized marijuana could produce up to $1 billion in new tax revenue. But legislation has yet to be proposed and it’s unclear ow soon cannabis could be sold if the law is approved.

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