Your accountant doesn't want you to be taxed for using an accountant in Illinois.
Even before an official proposal has been filed, the Illinois CPA Society, which represents certified public accountants, has come out in opposition to the idea of taxing professional services, such as those offered by accountants and attorneys.
Chicago Mayor Lori Lightfoot said earlier this month that she was considering ways to shore up the city’s finances, possibly by expanding the sales tax to include professional services.
“What we’re looking at is targeted at kind of higher-end professional services like a law firm that I left, accounting services,” Lightfoot said. “We’re not looking at expanding a service tax on mom-and-pop companies.”
Illinois doesn’t tax services and policies would need to be changed to allow Chicago to levy such a tax.
Illinois CPA Society CEO Todd Shapiro said it was difficult to comment on the idea because no official plan has been filed, but he said he was concerned that a professional services tax could quickly expand beyond Chicago and grow to encompass more services.
“There's always the fear of creep, what I would call scope creep and expansion,” Shapiro said.
He said if such a tax were to be implemented in Chicago, it would only be a matter of time before it was implemented statewide, compounding what he said would be negative impacts. That would be especially true with technology that allows for remote meetings anywhere in the world, Shapiro said. He said there’d be no business incentive to stay in Illinois.
“Listen, we’ll move our office to you pick the state. It could be across the border, it could be anywhere in the country, and we’ll have our individuals provide those services and benefits, provide those services to clients, from a different location,” Shapiro said.
He said he would expect such a tax to backfire.
“We very much believe it could result in lost jobs to the state, which would actually end up in a net negative position,” Shapiro said.
Shapiro also said higher costs for consumers could make them less likely to get professional help when needed.
While some have said that broadening the sales tax to include services could help lower the tax burden across the spectrum, Shapiro said he doesn’t believe a service tax is good tax policy.
Illinois lawmakers have toyed with the idea of expanding taxes on various services in the past, but such measures haven’t advanced in Springfield.