Many companies are passing those tax savings directly on to employees and customers, including ComEd which filed a petition with the ICC to pass along $200 million directly to rate payers through reduced charges.
For businesses, there are many changes in the law including a 21% top corporate tax rate, a 20% deduction for pass-throughs, and immediate expensing for 5 years on capital investments. But that just scratches the surface and the tax implications are significant and deserve a call to your CPA.
In addition, employers are encouraged to evaluate their payroll withholding policies as the IRS just updated the income-tax withholding tables for 2018 on January 11, 2018. These changes will likely result in more money in employees’ pockets immediately.
Locally, the City of Naperville passed a 2018 budget that was approximately $1.9 million above current revenue estimates. I wrote in late November that City Council should leave all options on the table to cut the budget to revenue projections, and though significant cuts were made there remains a gulf between what we expect to receive and what we will pay.
To solve this problem, the City of Naperville will likely look at four avenues to structurally balance the budget. On January 16, the City of Naperville performed the first reading on a proposed increase in the Hotel/Motel Tax as well as an increase in the Telecom Tax under the SMTT.
In addition, the Home Rule Sales Tax and Property Tax rates would be the levers left to pull to make up the difference.
The Naperville Area Chamber of Commerce has a longstanding opposition to the Home Rule Sales Tax. Any increase in the HRST increases the fundamental inequities in local tax policy vs. online sales and raises our effective rate versus our local competition as well. Raising the Naperville sales tax rate makes our businesses less competitive and more likely that consumers will chose to shop elsewhere.
Which leads us to the unfortunate decision of which tax would you rather pay? Which tax will be least detrimental to business growth.