On July 24, 2013, the Cook County Circuit Court issued a preliminary injunction enjoining Cook County from enforcing its controversial Non-Titled Personal Property Use Tax. Chicagoland Chamber of Commerce v. Zahra, No. 2013 L 051003 (Cook Cty. Cir. Ct., July 24, 2013). The ordinance, which went into effect in May 2013, imposed a 1.25% use tax on non-titled goods purchased outside Cook County, and was particularly burdensome on large buyers of commodities, such as construction firms and airlines.
The lawsuit, which was filed in June 2013 by the Chicagoland Chamber of Commerce, challenged the ordinance and requested a preliminary injunction. The legal standard for issuance of a preliminary injunction requires the court find that: (1) irreparable harm would result if an injunction is not issued; and (2) the party requesting the preliminary injunction has demonstrated a likelihood of success on the merits of its lawsuit. Here, the Court found that irreparable harm to taxpayers could result in the absence of an injunction, because paying unlawful taxes can have a negative impact on vendors forced to comply with the tax. In addition, the Court found that the complainant was likely to succeed on the merits of its legal arguments, which included allegations that the tax violates the State’s constitutional prohibition against ad valorem taxes on personal property.
As a result of the Court’s decision, taxpayers are not obligated to file any further Cook County Non-Titled Personal Property Use Tax returns unless and until the injunction is dissolved.