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dir="ltr" style="font-size: 12px;">If you buy something in Chicago, more than a dime on the dollar is going to state and local government, the highest sales tax in America.
The nonpartisan Tax Foundation analyzed sales tax rates in cities with more than 200,000 people and released a report Wednesday. When the state's 6.25 percent sales tax is combined with 4 percent split between the city, county, and a special transit tax, Chicago’s sales tax is 10.25 percent, that's tied with two cities in California for the highest combined rate in the country.
The Tax Foundation's State Tax Policy Analyst Janelle Cammenga said sales taxes are stable if they’re reasonable, but outliers like Chicago’s will change consumer behavior.
“People may need to buy necessities no matter what the economy is doing, but that doesn’t mean they need to buy things in town, especially in places where the sales tax is as high as it is in Chicago,” she said.
With the recent U.S. Supreme Court decision that says sellers need to charge the sales tax of where the buyer resides, Cammenga says complicated tax rates make doing business difficult.
“If people are selling to a bunch of different localities it’s going to be a lot more difficult and potentially raise some legal questions,” she said.