05-08-2025
John Curran: Illinois Democrats' delivery tax is a short-term cash grab paid by those who can least afford it
Well past midnight, on the final night of the spring session, Illinois Senate Democrats passed one of the most broad-based, regressive taxes on working families our state has seen in decades, which will affect every family and business from deep southern Illinois to towns on the Wisconsin border and everywhere in between.
This delivery tax would force each Illinoisan to pay an additional $1.50 on nearly every order placed in our state, regardless of its cost, size or supplier. Whether you are making a bulk order of expensive items or just need a pack of diapers for a sick child, the tax will charge you $1.50 on every order.
The Senate Democratic majority says groceries and prescriptions are exempt — but the moment your cart includes anything else, from shampoo to school supplies, the tax kicks in.
The majority of the estimated $1 billion collected yearly from Illinois taxpayers in all 102 counties will be sent to bail out the grossly mismanaged CTA and decades of unfunded pensions in the city of Chicago.
Unfortunately for Illinois taxpayers who are expected to shoulder this burden, the proposal lacks the meaningful reforms needed to improve transit funding long term and, as these Chicago bailout proposals always do, carves out an exemption for many deliveries in the very city it was created to help.
Known as the Retail Delivery Climate Impact Fee, the proposal would not collect a tax on any deliveries made by bicycle, which, because of congestion, are far more prevalent in Chicago, ensuring that suburban and downstate residents will be much more likely to be charged the fee. Besides being patently unfair, it doesn't make any sense, as studies show delivery services can actually help lower emissions by reducing trips to the store.
The regressive nature of the tax will have the worst effect on vulnerable populations, including low-income people unable to afford or store bulk orders, seniors, single parents and everyone without their own transportation. This effect on the poor is so concerning that a group of faith leaders sent a letter to Illinois senators opposing the legislation, saying the plan is 'a tax structure that punishes poverty.' Sadly, their pleas were ignored.
Data from Colorado, the only state that has enacted a broad delivery tax — 28 cents per motor vehicle order, a far cry from Illinois' $1.50 — validates their concerns. A survey of Colorado residents highlighted the tax's disproportionate impact on people with disabilities and low-income households. The share of the tax relative to income was over four times higher for households earning less than $25,000 per year compared with those earning $200,000 or more.
The tax increased take-out prices across the board, leading to more than hundreds of thousands of fewer delivery orders, millions in lost revenue for local businesses, and revenue and job losses for restaurant and delivery workers. The increased prices and reduced sales are especially burdensome for small businesses that already operate on razor-thin margins.
Other states are taking note, and in 2024 and 2025, every state that considered such a tax, including neighboring Indiana, dropped or rejected their proposals.
Maurice Scholten: The RTA has more money to work with than it realizes. State lawmakers need to know tax on working families is even more offensive when you consider the fact that Illinois brought in a record $54 billion in tax revenue in fiscal year 2025 — the most money our state has ever taken from taxpayers — and the Democratic majority still passed a budget with nearly $1 billion in additional tax hikes, budget gimmicks and no solution for the CTA.
There is no denying that we must continue to invest in our state's public transit system for the millions of Illinois families, students, tourists and workers who rely on it. But the taxpayers who pay for it deserve a fiscally conservative approach and reforms needed to ensure a world-class, safe and soluble system — not a short-term cash grab that hurts, rather than helps, Illinoisans, $1.50 at a time.
