Wednesday, March 21, 2012

'Amazon Tax' Fails to Raise One Cent of New Revenue: Illinois Learns About The Diminishing Returns of Taxation

Chicagoist reports:

When House Bill 3659, otherwise known as the "Amazon Tax," was first passed in January of last year, state Sen. John Cullerton (D-6th), who co-sponsored the bill with state Rep. Pat Verschoore (D-Milan), boldly stated that "Illinois would generate an additional $150 million in much-needed revenues" under the new law. Skeptical of that huge amount of money (which would have been a more than 50% increase in use tax collected), we looked at the numbers and determined it was way off.
There's more:
The result? An actual decrease in use tax collected of over $11 million. Numbers given to Chicagoist by the Illinois Department of Revenue show that in the period of January 2011 through June 2011, IDOR collected approximately $139 million in use tax. After the law went into effect on July 1, the total amount collected between then and the end of the year was approximately $127 million.
Taxes have consequences!