Illinois State legislators are mulling over a bill that would add a 6.25% sales tax on repair and maintenance services. My Journal Courier reports that the bill is raising concern among …
Illinois State legislators are mulling over a bill that would add a 6.25% sales tax on repair and maintenance services. My Journal Courier reports that the bill is raising concern among homeowners and businesses alike, as it would raise the price of home repairs.
While lawmakers have not revealed the specifics of the bill, My Journal Courier reports that the bill will likely be similar to one in Wisconsin. This bill taxes home repairs on appliances like furnaces, water heaters, and HVAC systems.
This bill could impact projects like bathroom maintenance, which according to the National Association of Home Builders, 78% of rennovations and are the most-requested type of home improvement. This would impact local plumbers like Lewis Williams, who said in a statement to My Journal Courier that the bill will take business away from service companies as people try to perform these remodels themselves.
“It’ll drive more people to get unlicensed work done,” Williams said. “When that happens, it can end up being dangerous for them. Things may not get done up to code. I see more homeowners taking a risk and doing the work themselves.”
With this added financial burden, some homeowners will likely choose to not renovate at all. With 35% of remodels involving the whole home, entire houses may sit untended. This could lower the quality of entire communities, David Padgett, president of the Home Builders Association of Greater Southwest Illinois, said in a statement to SW Illinois News.
“People already don’t like to maintain their homes because of cost,” he said. “That brings down neighborhoods.”
Further adding to the lists of inconveniences for homeowners, avoiding home maintenance and remodels will eventually lower the home’s resale value. Even a minor kitchen remodel has an ROI of 82.7% . Without this convenience, homeowners could be missing out on successful selling in the future. This blow to the housing market would add to the list of industries that could be effected by this tax. In a statement to My Journal Courier, Home Builders Association of Illinois President Allen Drewes said that people not purchasing renovation services could be detrimental to the state’s already fragile economy.
“It’s bad enough our state’s economy can’t seem to recover from the depths of the recession, and not enough people feel comfortable they will have their job tomorrow to invest in their homes for the long term here,” he said.
He added that legislators should be making an effort to create the opposite effect, building up the economy be encouraging renovations and the hiring of service workers.
“This tax will lead to layoffs, higher costs and less work for businesses like mine, and that means I’m spending less money here in the restaurants and at the stores,” Drewes said. “If we want to get more revenue from home projects, give incentives for people to do the projects — don’t make it harder.”