Are Peoria businesses charging you too much sales tax? If they are, good luck getting them to fix it; you won’t find any help from the city or state. Check your receipt. For general merchandise, you should only be charged 8% in most of the City of Peoria.
My dad knows that, which is why he was surprised when some clothes that my mom bought at Northwoods Mall today were taxed at 9%. He wrote me to ask when the tax rate was raised, and how he could have missed the news. My dad has been reading the Journal Star cover to cover every day for the past fifty years, and he pays particularly close attention to financial information, so it would be very unlikely he missed big news like the sales tax going up a whole percent city-wide. And I have some experience exposing businesses that charge too much sales tax.
I checked the city’s website and confirmed that it was still 8%, broken down as follows:
- 6.25% State of Illinois
- 1.50% City of Peoria
- 0.25% County of Peoria
He called the store and told them that information, and they said “it went up July first in Peoria to 9% from 8 1/4.” Dad said it was never 8 1/4% ever in Peoria, and the salesperson said “it is all done from their corporate offices in Minnesota,” and gave him the phone number for their corporate office. Oh, and by the way, they added, you’ll have to sit through a long automated voice-activated system before you get to talk to a real person. That’s customer service for you. So the local business isn’t taking action to fix the error.
Well, I called up the finance department at the City, and they told me that the tax rate did go up July 1st in Peoria to 9%, but only within the boundaries of the Hospitality Improvement Zone, or HIZ. You may recall that the City imposed a 1% additional sales tax on a small area downtown that includes the Pere Marquette, Holiday Inn City Centre, and Mark Twain Hotel; that money is to go toward building a new Marriott next to the Pere Marquette, so the other hotels get the pleasure of contributing to their competition and put themselves out of business. But I digress.
The City’s finance department went on to say that they’ve gotten several calls about this problem (i.e., businesses outside of the HIZ charging 9% sales tax), and that there appears to be some confusion among the city’s businesses as to what tax rate they are supposed to be charging. The person I talked to said one man called in saying he got charged 9% at a North Peoria gas station, and that the station refunded the overage when he went back to complain after talking to the city. I asked if the city could do anything to correct the problem, and they said all they can do is refer me to the Illinois Department of Revenue, and they didn’t have the number, but I could get it by calling information. So the City isn’t taking action to fix the error.
I called the Illinois Department of Revenue and they verified that the correct tax rate is 8% outside of the HIZ. It’s even on their website at http://tax.illinois.gov/ — you just click on the Tax Rate Finder link on the menu to the left and follow the prompts. The HIZ rate of 9% is listed first, which may be part of the confusion, but it also provides a list of the individual business addresses that are affected by the HIZ tax (there are only about 46 of them), and the next rate says “OUTSIDE ABOVE DISTRICT(S)” and lists the 8% rate.
I asked the representative what could be done about businesses overcharging, and she said that the correct rate is preprinted on the tax remittance form the businesses send to the state. She said the business can call Central Registration at 217-785-3707 with their Illinois Business Tax (IBT) number and verify the correct rate. But she said it probably wouldn’t do any good to report them to the “cheat line” (1-800-243-2811). As far as the state is concerned, as long as the business is remitting the total amount of tax they collect, they’re okay. It’s only tax fraud if they collect, say, 9%, but only remit 8%. As long as they remit the whole 9%, the state doesn’t care and is happy to keep the money. So the state isn’t taking action to fix the error.
Apparently no one is looking out for consumers in this town. Businesses can charge any additional tax amount they want and the city and state don’t give a rip. It’s up to you, the citizen, to take matters into your own hands and convince the businesses and/or their parent corporations that they’re overcharging us. There’s no penalty, no law against overtaxing. You have to take action to fix these business errors, and good luck doing it.
This is flipping unbelievable. This last weekend I was charged 10% at Willow Knolls Theatre, I could not believe it. Is that right? Why are they charging so much tax?
Good citizen journalism there, C.J.
Serenity. Not sure about that. They might also be charging the HRA tax. But I don’t think it’s 2 percent age points.
Serenity — I don’t know off the top of my head; I’d have to check with the city. On what exactly were you charged 10%? Was it added to your admission charge, or your concessions purchase? Food and amusement have different tax rates.
Billy — Thanks!
How about groceries? My receipt shows 10% for that – all food.
Kohlrabi51869 — Groceries should only be charged 1%, and I’ve never heard of a grocery store charging more than that. However — that’s just on groceries. There are other types of things that you might call “food” that the government doesn’t consider “groceries.” Like soda pop. It’s not a grocery item, so you get charged a full 8% on that. Liquor, of course, has its own tax, but I don’t know what it is. If you get food pre-prepared at the grocery store, I think you get fully taxed on it — in fact, that’s the only thing I can imagine getting charged 10%, but even then I’m not sure…. I’m not a tax expert. You’d have to check with the city to find out for sure.
Concessions purchase for sure. I will have to double check about the admission ticket. I think I will call them tomorrow (if it is possible to actually talk with someone) or I will stop by there when I am out that way.
Great post CJ! Ever since moving to Peoria I have been trying to get a handle on the varying tax rates around here. Now I have one more variant to watch out for!
Oops! I’ll blame lack of reading glasses instead of math skills. They charged 1% for groceries.
Reminds me of PI’s old post:
http://peoriaillinoisan.blogpeoria.com/2008/05/21/retailing-for-dummies-chapter-27/
It is the same in many states. As long as the business sends in what they collect and the amount they collect is at least equal to the real amount, there isn’t “a problem” according to those states. There is only a problem when they collect too much and send in the correct amount or too little tax.
Why don’t you contact the two fellows running for U.S. Senate, Kirk and Giannoulias, and see what they can do on the state level? It would be curious to see how they would address the issue…rhetoric or action.
but not only that. How about Jehan Gordon and what’s-his-face? Don’t remember his name. I only moved here 4 months ago.
Ooh I see an early issue. Wonder what Giannoulis would do?… He is state treasurer.
Ha ha ha ha ha
Does anyone expect any different behavior from our greed driven profit mandated economy?
It isn’t the job of businesses to be ethical (marketing) or even honest (see advertising). Their job is to take as much of your money as possible any way they can.
Caveat emptor!
btw did you know it was not only legal but “normal” for gas pumps to be off as much as $.06 per gallon?
The easy fix is buy outside of Peoria.
I think “what’s his name” is Leitch!
Yep, it is the HRA (amusement) tax that adds 2% to your 8%. This was supposed to have been a temporary tax 25 years ago to help get the Civic Center off the ground and on its feet. Restaurants, movies, hotels, etc. all “get” to charge you that 2% and send it to city hall. Sometimes you don’t notice it because it is built in to the cost of the item you are buying.
As for complaining to a store, restaurant, etc. about the higher taxation; good luck. I work here for an out of state owner that dictates everything from there. So if they were to program in 20% tax, there isn’t much I could do about it except call and ask why.
I guess it’s no surprise that many people buy online.
Martin, that is not an easy fix, because thgis probably happens at some places every where. The tax is around 9 in many places across the river already. There is no EASY fix and that is why it is so frustrating.
Chef Kevin,
“temporary tax”
What is that?
Sharon makes an interesting point. Depending on what your are purchasing, etc., it is often easier to buy on-line.
I prefer to support ‘local’ business establishments when I can. ‘Sales tax’ has always been the nature of the beast, but it seems to be getting out of hand.
Many of you will say I am beating a [very] dead horse, but I am still surprised that any of the Peoria area businesses supported the ‘museum’ sales tax. Did they really think that any new business generated by the museum [downtown], would offset ANOTHER tax?
Illinois merchants are not paid to collect the state sales tax from our customers and then the state does not even provide an envelope, let alone a stamped envelope, to send the sales tax to Springfield-but we are certainly liable if the money is incorrect or late.
Paul O’Donnell
Second Chance Books
NV: Ha ha — ever heard of social pressure? I talked with someone recently and the reason that person voted for the museum was that a good friend was one of the organizers and well that person had to vote for it…. to each their own. Upon further discussion — that person started having seconds thoughts on that yes vote…..
Chef Kevin,
“temporary tax”
What is that?
It is a thing called lies that politicians feed us and we gobble it up.
There is a blip in the paper this morning imploring citizens to contact the City Finance Dept if they are not being charged the proper sales tax amount.
Illinois would not always be the beneficiary of the improper, yet inadvertent excess tax collected.
In a purely hypothetical scenario, a small business programs its register to assess sales tax at a rate of 9%. At month’s end, the business reports a summary of its sales to the accountant who it uses to calculate its payroll and sales tax. Unbeknownst to the retailer, the accountant correctly calculates the tax to be remitted to Illinois at 8% and, voila, the retailer retains the improperly assessed excess.
I believe with larger businesses it would be a direct pass-through calculated “in-house.” In other scenarios, the retailer may actually dump a month’s worth of register tapes on the accountant, in which case the error would likely be detected. There are scenarios, however, where the retailer would be the unknowing (I trust) beneficiary.
There is a blip in the paper this morning imploring citizens to contact the City Finance Dept if they are not being charged the proper sales tax amount.
…no credit given to CJ though.
Diane: Did you know that media outlets read CJ’s blog for story ideas? And that’s the truth — first hand from reporters! 🙂
I thought the same thing this morning–that C.J.’s blog was the origin of this story. I’m off to Bed, Bath, and Beyond right now–already planned before I read this morning’s paper–I’ll be curious to see how much tax I pay.
Bed, Bath, and Beyond tax is now 8%–the clerk told me that it was recently changed from 9 to 8.
speaking of other local merchant “errors” to their favor – there’s a certain pizza joint that I won’t mention by name but hint that it has a name something akin to firefighters which charges full tax on their take and bake pizzas. That is wrong and I’ve pointed it out to them that Nick-n-Willy’s don’t nor do grocery stores. Raw pizza is only subject to 1% not 8%.