Going against some of his GOP peers, Sen. Chris Nybo (R-Lombard) spoke up against bipartisan-sponsored legislation.
SB2577, sponsored by Sen. Pam Althoff (R-McHenry) and Sen. Cristina Castro (D-Elgin), mandates out-of-state retailers whose products are purchased online by Illinois residents collect a use tax, a measure that would level the playing field for brick-and-mortar stores, according to the bill backers, who presented the Marketplace Fairness Act at the April 17 Senate Floor Debate.
“I certainly appreciate all the work that has gone into this and no disrespect to anyone who stands in support of this bill, but some people may say that this bill is effectuating a tax increase,” Nybo said.
Sen. Chris Nybo (R-Lombard)
Countering Nybo, Althoff immediately rose and said the bill did not raise levies.
Sen. Chuck Weaver (R-Peoria) challenged Nybo's statement as well.
“Talking to constituents, I think we typically understand that folks see this as a more fair tax because we understand how it is hurting our brick-and-mortars,” Weaver said.
Sen. Karen McConnaughay (R-St. Charles) asked the sponsor to clarify how local government is being affected without her legislation. The negative domino effect of e-commerce is costing small businesses to lose money, which means people are losing jobs, Castro said.
“I applaud you on the bill, and I think this allows brick-and-mortar and Main Street business to stay in business,” McConnaughay said. "Folks need to understand that it is not just going to the store where you pay taxes, and I encourage an 'aye' vote as well."
Sen. Dan McConchie (R-Hawthorne Woods) said the tax is already owed and is not an increase at all. He said that it simply “levels the playing field for local businesses,” who are losing sales to the internet in order to save $10 or $20 to avoid local sales tax.
As a business owner, Sen. Jim Oberweis (R-North Aurora) had concerns about his commerce, admitting he may have to abstain from the vote. He asked the sponsor if her bill passed, would his business have to pay sales tax on a product sold to an out-of-state customer.
No, Castro said, providing Oberweis an example using Wayfair as an instance.
“If they sell their product to someone in Illinois, they would have to collect and remit sales tax, and it’s very similar to what Amazon does right now,” Castro said. “If you buy something on Amazon, they collect and remit the sales tax to Illinois.”
SB2577 passed 39-10.
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