By Jim Covington, Director of Legislative Affairs

It has been quiet in Springfield regarding the revenue side of the budget equation. But, at some point, a discussion about a service tax may reappear as part of an effort to address Illinois’ budget needs and solve the related deficit.

Gov. Rauner’s 2014 campaign advocated for a service tax that included a tax on legal services. This part of his plan accounted for one-quarter of the $577 million that was estimated to be generated by this tax. This is to address the estimated $8.5 billion in unpaid bills at the end of the calendar year.

So, the idea of taxing our clients isn’t going away, and we wanted to remind you of this issue. We’re linking to a recent joint study by the Taxpayers Federation of Illinois and the Center for Tax and Budget Accountability and an article in State Tax Notes. The joint study recommends against imposing a service tax on professional services (page 9) but does recommend an expansion of Illinois’ sales tax base. The article, entitled “Taxing Services is No Panacea” by Brian Hamer, former Illinois Director of Revenue, is a concise four-page discussion of the service tax issue.