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County Government Authority to Pass Sales Taxes in Support of Public Health

posted on Tue, Aug 16 2016 9:58 am by The Network

A local public health officer in Illinois recently asked the Network for information on the authority of county governments in that state to pass a sales tax to be used in support of public health operations.

The Network explained that the extent of authority held by an Illinois local government depends on whether it is a home rule or non-home rule unit. The home rule or non-home rule status of a particular county or municipality is explained in Section 6 of Article VII of the Illinois Constitution. This section also describes the powers of a home rule unit, while Section 7 describes the powers of a non-home rule unit. Broadly speaking, “a home rule unit may exercise any power and perform any function pertaining to its government and affairs,” including the power to tax, unless the power is specifically limited by the Constitution or state law. In contrast, non-home rule units may exercise only those powers specifically granted to them or necessarily implied by law. This concept is further explained in Illinois Attorney General Opinion 83-005.  According to the Illinois Association of County Board Members, Cook County is currently the only home rule county in Illinois.

The Illinois Counties Code (55 Ill. Comp. Stat. § 5/5) contains several provisions that prescribe and limit counties’ authority to impose sales taxes. Again, home rule counties and non-home rule counties have different defaults: home rule counties may exercise powers unless limited by law, and non-home rule counties may not exercise powers unless expressly authorized by law. Thus, for example, home rule counties’ general authority to impose taxes on retailers and service providers selling tangible personal property (commonly referred to as sales tax) is limited by the Home Rule County Retailers’ Occupation Tax Law found at 55 Ill. Comp. Stat. § 5/5-1006 and Service Occupation Tax Law found at 55 Ill. Comp. Stat. § 5/5-1007, which prohibit taxation of certain items, such as food for off-site consumption and prescription and non-prescription medicines and medical appliances.

In contrast, non-home rule counties are granted limited authority under the Special County Occupation Tax for Public Safety, Public Facilities, or Transportation Law found at 55 Ill. Comp. Stat. § 5/5-1006.5 to impose a retailers’ and service occupation tax. This law allows any county to impose a “sales tax” (similarly excluding certain food and medical items), but only if the tax is approved by voters and if revenues are used exclusively for a voter-approved public safety, public facility, or transportation purpose. Under part (j) of this section, “public safety” includes but is not limited to crime prevention, detention, fire fighting, police, medical, ambulance, or other emergency services. However, further discussion of the definition of “public safety” in Illinois Attorney General Opinion 97-012 suggests that the legislature intended a tax for this purpose is to be used only for goods, services, and programs to reduce or prevent criminal activity, and not for other activities like provision of ambulance or fire protection services. 


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