The City of Chicago recently issued nexus guidance and a limited safe harbor for City tax purposes in light of the U.S. Supreme Court’s pivotal South Dakota v. Wayfair ruling and the State of Illinois’ statutory economic nexus standards. True to form, the City implemented its new nexus standards by executive action via publication of a “nexus and safe harbor” “information bulletin” on its website (available on the City’s website, here), as opposed to the Chicago City Council more formally (and more appropriately) adopting a new ordinance.
Cook County, Illinois lawmakers recently voted to repeal the nation’s largest soda tax only two months after it went live (the repeal scheduled to be effective at the end of Cook County’s fiscal year – November 30, 2017). And this is on the heels of a soda tax defeat in May of this year in Santa Fe, New Mexico, where voters rejected a local soda tax measure by a significant margin. All of this hostility to the soda tax reached a crescendo in Michigan, where the legislature approved a bill to preemptively ban local governments from levying excise taxes on food, in response to the national trend of taxing sweetened beverages. Michigan bill H.B. 4999 cleared the Senate on October 12, 2017 with a 30-5 vote, after passing the House on October 5, 2017. Specifically, the bill prevents localities from imposing taxes or fees on the sale, manufacture, or distribution of food, including beverages and chewing gum.
On January 20, 2017, the Illinois Supreme Court issued a taxpayer-friendly opinion in The Hertz Corporation, et al v. The City of Chicago, 2017 IL 119945. At issue was whether the City of Chicago (the “City”) could mandate collection of its Personal Property Lease Transaction Tax (the “Transaction Tax”) from certain car rental agencies located outside its borders based on presumptive, but not actual, use of property within the City. Hertz Corporation and Enterprise Leasing, Inc. challenged the City’s extraterritorial tax scheme as a violation of both the Illinois Constitution and the U.S. Constitution. The Illinois Supreme Court struck down the tax, holding that it violated the Illinois Constitution.