In August the Illinois Attorney General’s Office announced six indictments related to unpaid sales taxes. The individuals indicted were all gas station owners. This was the latest series of indictments to come out of an investigation that has been underway since 2008. Since then IDOR reports it has collected nearly $13 million in unpaid taxes from 66 gas station owners.
The State of Illinois, and The City of Chicago in particular, not only has the highest sales taxes in the country, it has some of the most complicated. Essential foodstuffs and qualifying medical supplies are taxed at a lower rate than other items, but not everything in the grocery store counts. The tax rate on a candy bar will be higher than that on a loaf of bread. Within city limits there’s a tax on bottled water. Anything bought within a certain proximity to downtown or at O’Hare or Midway airports, incurs additional sales tax. There are additional taxes on cigarettes, soft drinks and alcohol.
Business owners are expected to pay sales taxes to the state. It’s a sizable income stream for the state government, and as the continuing investigation into gas station owners shows, it’s something IDOR takes seriously. Attorney General Lisa Madigan put it this way: “The indictments announced today, and our ongoing investigation, send a strong message to gas station owners: if you defraud the people of Illinois by not paying sales tax, you will be aggressively prosecuted.” In Illinois, each count of sales fraud can be punished with a jail sentence of two to five years.
If you find yourself facing a sales tax audit, an income tax audit, a sales tax criminal investigation or an IRS criminal investigation, contact the Chicago tax lawyers of Horowitz & Weinstein.