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The latest on the Key Bridge collapse, New York puts forth legislation to get clean energy projects on the grid and Wisconsin and other states join a federal summer food program to help feed kids across the country.

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Republicans float conspiracy theories on the collapse of Baltimore's Key Bridge, South Carolina's congressional elections will use a map ruled unconstitutional, and the Senate schedules an impeachment trial for Homeland Secretary Mayorkas.

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Illinois Taxpayers Losing Millions to Legal Skimming?

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Wednesday, November 19, 2008   

Chicago, IL – As state lawmakers work to fix a budget deficit of almost $2 billion, a new study says Illinois is wasting millions in tax money. The study by Good Jobs First looks at the compensation retailers receive for collecting state and local sales tax. Illinois is one of 26 states that allow such compensation, and it amounts to more than a billion dollars a year total for those states.

Good Jobs First research director Philip Mattera, principal author of the report, says that unlike many other states Illinois has no cap on that compensation.

"Illinois loses more in tax revenue from to this practice than any other state. It comes out to about $126 million a year in what you might call sales tax leakage."

Mattera says Illinois is among 13 states that don't cap the amount of tax money that can go to retailers.

"Illinois allows all retailers to keep 1.75 percent of all the sales tax that they collect. And when it comes to the big retailers like Wal-Mart or Target, they're keeping quite a bit of money."

The report recommends that Illinois adopt a ceiling on the compensation, arguing that large chains have fixed costs that don't rise as collections increase. It says Wal-Mart alone receives $60 million a year nationally from these programs.

Nineteen states don't allow such retailer compensation, and the remaining five states have no sales tax. Supporters of the program say that, since it costs retailers money to collect the tax, they should be compensated. Attempts to get lawmakers to put a cap on the compensation in Illinois have failed in the past.



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