Illinois’ income tax will hold steady at 4.95% in 2020, and despite warnings from Mayor Lori Lightfoot that a property tax hike could be in the cards, Chicago’s new budget avoids one.
But before you go on a holiday shopping spree, a word of caution: You may still have to shell out more money in taxes and fees if you own a car, depend on ride-hailing services or frequently dine out in Chicago.
Tax increases on the state level will by and large go toward funding $45 billion in infrastructure improvements via a program branded Rebuild Illinois. Already in July, Illinois’ gasoline tax doubled from 19 cents a gallon to 38 cents a gallon and the state increased its tax on cigarettes by $1, to $1.98 a pack. Proceeds from sports betting and new casinos will also go toward capital improvements.
In January, new taxes will further build up Rebuild Illinois’ coffers.
The state is implementing its first tax on parking, at a rate of 6% of the price of hourly, daily or weekly parking or 9% for a parking space purchased or rented on a monthly or annual basis.
The cost of annual vehicle registration is also increasing by $50 in 2020, so it’ll cost $148 for a license plate sticker. If you own an electric car, the state will begin charging another $100. The law says that’s a fee “in lieu of the payment of motor fuel taxes.”
Drivers looking to sell their cars have an incentive to trade them in before 2019 is over, given that 2020 will bring with it additional sales taxes on trade-in values over $10,000.
Drivers who park their cars in Chicago will pay more at meters and garages, given meter rate hikes taking effect on Jan. 1.
That’s also when the city’s 0.25% tax on food and drinks sold at “retail establishments” will rise to 0.5%.
There’s a small reprieve before Chicago’s new congestion tax takes effect. Starting Jan. 6, taking a solo trip using a ride-hailing service in Chicago triggers a fee of $1.13 plus another $1.75 for solo trips that go in and out of downtown on weekdays.
But riders who share a trip using ride-hailing “pool” services will pay a lower fee than they do now.
Follow Amanda Vinicky on Twitter: @AmandaVinicky