Trying to understand taxes (Chicago: sales, renting, how much)

[efrenb5]

I am looking at Chicago as a possible relocation spot in about 2-3 years. All this talk (here and in other forums) about high taxes has me confused. After all, if there are so many people living in Chicago, they must be doing something good over there, taxes and all. The other candidate for relocation would be Boston, MA, if anybody wants to dare a comparison. I am planning to move with my wife, no kids ever, two cats, and no car ever.

In Chicago, as far as income taxes go, there are the usual: federal, state, social security, medicaid, and disability. Are there any more taxes like a city income tax or some hidden tax you don't usually see in other cities?

As far as a sales tax go, there is something like 9.75% in Chicago if I remember correctly, and it is added to EVERYTHING you buy, including non-processed food and all kind of clothing, there are no exceptions. Medicines have a 2.2% tax. This is the most worrying thing so far. The sales tax in Boston is 6.25% and is not added to non-processed food and clothes under $175. Even with a high sales tax, do you think $200-$300 a month for groceries would be enough for two people plus pets?

Another thing that caught my eye was the Use Tax. Is this currently enforced? If I buy something from out of Chicago or Illinois (like a DVD player or clothing), do I have to pay a tax for these items? Also, would I have to pay sales tax on top of the use tax on these items?

I have the impression that, because Chicago rents are usually lower compared to Boston, the high sales tax in Chicago just balances out the costs to live in both cities.

Even after all the odd taxes, would you say this is OK?
Heat := $300
Cell := $70 (with unlimited data plan)
Electric and water := $100
Cable and internet := $120

Last question. Do the $86 a month fee for a Chicago Plus Card has tax included or do the real cost is something like $90 after taxes?

Sorry for the long post. I am getting the most information I can so I can make a decision between Chicago and Boston.

[oakparkdude]

Non-restaurant purchased food, medicines, and medical devices are taxed at a lower rate than most other goods. The use tax is unenforceable, and is pretty much par for the course nationwide. In general, rents are significantly lower here than in Boston. Unless you're purchasing an extraordinary amount of goods every month the sales tax doesn't really amount to much. (For example, if you purchase $10,000 of goods every month, that will cost you about $350 more in Chicago than Boston which might be equivalent to the savings in rent.)

The big difference and biggest complaint is the high property tax. If you're renting, that's not really your concern (its the landlord's problem.)

[chirack]

CTA and Metra fares are not taxed so it is $86 a month(You might run into a fee if bought from a currency exchange vs. directly). No city income tax but lots of little fee can add up like the $1 tax on bottled water.

[efrenb5]

So groceries would be taxed lower? What is the sales tax for groceries and medicines then?

About the use tax, nobody pays this then? Even if it is technically illegal? Could you get into trouble for not paying it?

What is this $1 tax for bottled water? How much is a bottle after tax? $2?

[Vlajos]

Sales tax will be reduce to 9.25% in the next two years, just so you know.

No City income tax. 5% flat throughout the state. Actually the rate of 5% is only in place for another two years or so. I wouldn't count on it going back to 3% though.

Utilities are totally dependent on where you are living.

[chirack]

Originally Posted by efrenb5

About the use tax, nobody pays this then? Even if it is technically illegal? Could you get into trouble for not paying it?

What is this $1 tax for bottled water? How much is a bottle after tax? $2?

Use tax? Do you mean things like city sticker for your car or state sticker for your licensplate(if you own a car or motor bike).

No it is what ever the water cost plus a dollar. So if the bottle was .50 it is now $1.50 after tax. Only applies to bottled water bought in the city of Chicago.

[MannheimMadman]

I've never paid the use tax, nor do I intend to.

If you're renting, water is almost always included in rent. In many places, heat is also included as well.

On months when air conditioner is not running, my electric bill is only $25. I also don't own a television either - just a small media laptop.

If you do end up paying for heat (as I do, currently) it can vary wildly depending on what temperature you keep your place. I have a fairly good sized 1BR and my heat/cooking gas was $75 for the month of November.

So many variables.

[efrenb5]

The use tax is a tax on things you buy out of state. I read it somewhere (will find the page and post it).

So it's $1 fixed tax? Wow. *chuckles* Sorry for laughing, but who thought of this? Actually, it should make people buy a durable plastic bottle and reduce water bottles in landfills. Those are starting to be a big problem. If that was the reason for the tax, not a bad idea after all.

Good to know the sales tax should be lowered relatively soon. If the state tax is currently flat at 5% and is bound to change, do you think it will be increased or lowered? 3% would be awesome, but quite doubtful.

About utilities, the numbers are just a rough estimate. Just trying to have a general idea of what to expect. I am not planning on living on the loop. So maybe that helps giving you a better idea?

[efrenb5]

Wow, $25 for electric. I am paying $100 here in Puerto Rico and only turn the AC on at 12AM and turn it off at 7AM.

I am reading that, when heat is included, the building is usually old and has a central boiler and radiators in the units, which you cannot adjust for temperature. Even so, what is the general opinion about this? Are the units always kept in a good temp or will you sometimes freeze your butt off?

[chirack]

Originally Posted by efrenb5

Wow, $25 for electric. I am paying $100 here in Puerto Rico and only turn the AC on at 12AM and turn it off at 7AM.

I am reading that, when heat is included, the building is usually old and has a central boiler and radiators in the units, which you cannot adjust for temperature. Even so, what is the general opinion about this? Are the units always kept in a good temp or will you sometimes freeze your butt off?

Depends on the building by law there is a certian tempture that must be mainted 65F non peak 68F peak. The trouble is the amount of heat a place has depends on a lot of factors(i.e. Is the sun coming in giving a green house effect? How well insulated is the building. How far away are you from the radiator?)