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Court rules Cook County use tax illegal

Tuesday, October 08, 2013
Crain's Chicago Business
by Paul Merrion

Cook County's controversial use tax on goods bought outside the county was declared illegal yesterday.

The ruling from the bench by Circuit Court Judge Lopez Cepero means taxpayers won't have to pay the tax or file returns while the county appeals the decision, according to lawyers involved with the case.

The tax was meant to plug a hole in the county's budget as well as encourage taxpayers to buy from companies in Cook County. But it created significant tax bills for big buyers of steel, fuel and other commodities and a paperwork burden for smaller taxpayers.

A written order is expected Oct. 11, after which the county will have 30 days to appeal.

"We are awaiting the judge's written, enforceable order," a county spokesman said in an email. "We intend to petition the circuit court for a stay of the injunction, and we are prepared to move immediately to the appellate court as soon as the judge issues his written order."

The Chicagoland Chamber of Commerce took the relatively unusual step of joining two law firms that sued the county on their own behalf. Reed Smith LLP and Horwood Marcus & Berk argued that the tax violated both the Illinois and federal constitutions and exceeded the county's authority under state law.

Last week, the Appellate Court of Illinois granted the county's request to stay the circuit court's preliminary injunction against the tax, issued in July, but with several restrictions that said the county couldn't enforce the tax's penalty provisions against companies that don't file returns.

The county had expected the tax to add about $11.7 million to revenues next year.



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