'Sneaker Tax' Eyed as Answer to an Illinois Nonprofit's Problems
An Illinois state representative has proposed levying a special tax on all sales of athletic shoes in the state, with revenue from the tax going to fund youth programs.
House Bill 978, the Athletic Shoe Retailer Tax Act, was introduced on Jan. 28 by Rep. William Davis and would impose a 25-cent tax on every pair of sneakers sold in the state after July 1. All proceeds would go to Illinois YouthBuild, a nonprofit that provides job training for disadvantaged youth. The Chicago Sun-Times reports that budget constraints have led the state to cease funding the nonprofit for the last three years. Davis says the sneaker tax would bring in $3 million a year for the organization.
The full text of the bill affirms that the sneaker tax is limited to athletic shoes only, which it defines as "a shoe designed primarily for sports or other forms of physical activity, and includes, without limitation, shoes designed for running, walking, basketball, baseball, football, tennis, or soccer."
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While new taxes always raise some hackles, there hasn't been much backlash against the proposal thus far. Product-specific taxes often take the form of "sin taxes," targeting vices like smoking and alcohol-use in an attempt to both raise revenue and reduce those behaviors, but the sneaker tax certainly isn't aimed at reducing sales or stopping kids from playing sports. And at just 25 cents a pair, the tax is unlikely to be a real burden to Illinois consumers. Even if retailers pass along the entire cost of the sneaker tax to their customers, it's hard to imagine anyone spending $160 on a pair of Nike Air Jordans sweating an extra 25 cents on the receipt.
And while the Illinois Retail Merchants Association expressed opposition to the bill when contacted by the Sun-Times, the fact that it steers revenue to youth programs means that it has some built-in support from parents who might otherwise balk at being taxed on their kids' soccer cleats. Local news site DNAinfo Chicago talked to several parents shopping at a Nike Outlet who said they were fine paying an extra quarter for shoes to assist disadvantaged young people.
"What's an extra 25 cents?" said one parent quoted by the site. "Paying more to buy gym shoes is not a problem for me, especially if the extra money would be used to finance youth programs."
Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.
