Starting July 1 you might notice your wallet a little lighter after shopping in Naperville.
That’s because the home rule sales tax is increasing from 0.5 percent to 0.75 percent – making the total sales tax in Naperville 7.75 percent.
It’s a measure the Naperville City Council approved in order to help fill a $2.1 million budget hole left when they decided not to raise property taxes.
About half of revenue from sales tax comes from visitors to the city, taking some of the burden off residents.
“From my point of view, if you have to raise revenue, the sales tax is preferred as long as the sales tax rate that we have is still competitive both locally and nationally, which ours clearly is,” said Councilman Kevin Coyne.
But even with expected annual revenue of $4.46 million from that increase, city staff expects a property tax increase in 2019. That’s why Councilman John Krummen said he voted ‘no’ to the sales tax increase.
He asked, “Why are we doing the gymnastics that we have to do now in order to not raise property tax if we’re going to end up raising them next year?”
Krummen also argued the measure is overtaxing because the annual income from the sales tax is larger than the budget hole.
Mayor Steve Chirico disagreed, saying the income will be necessary next year and increasing sales tax is kinder for those on fixed incomes.
“Property tax is a mandate,” Chirico explained. “It’s a tax mandate on our seniors and everybody. Sales tax, you do have a choice. You can spend less and pay less tax.”
The tax does not apply to groceries, cars, services and some prescription drugs.
The entire home rule sales tax is set to expire in 2020 unless council takes action to extend it.
Naperville News 17’s Beth Bria reports.
