The RTA Sales Tax is the primary source of revenue for the RTA system. The tax is authorized by Illinois statute and imposed by the RTA in the six-county northeastern Illinois region. The RTA sales tax is collected by the Illinois Department of Revenue and paid to the Treasurer of the State of Illinois to be held in trust for the RTA outside the state treasury. Proceeds from the RTA sales tax are paid monthly directly to the RTA, without appropriation, by the State Treasury on the order of the State Comptroller.
Traditional RTA Sales Tax
The traditional RTA sales tax is the equivalent of 1 percent on sales in Cook County and 0.25 percent on sales in the collar counties of DuPage, Kane, Lake, McHenry and Will. The 1 percent sales tax in Cook County is comprised of 1 percent on food and drugs and 0.75 percent from all other sales, with the state then providing a "replacement" amount to the RTA equivalent to 0.25 percent of all other sales.
The RTA retains 15 percent of the total traditional sales tax and passes the remaining 85 percent to CTA, Metra and Pace. Of this 85 percent, CTA receives 100 percent of the City of Chicago tax and 30 percent of the suburban Cook County tax, Metra receives 55 percent of suburban Cook County tax and 70 percent of the tax collected in the five collar counties, and Pace receives 15 percent of the suburban Cook County tax and 30 percent of the collar counties' tax.
New RTA Sales Tax, New PTF, and New RETT
In January 2008, Illinois Public Act 95-0708 increased the RTA sales tax rate throughout the region, increased the real estate transfer tax (RETT) in the City of Chicago, and raised the portion of RTA sales tax revenues matched by the State Public Transportation Fund (PTF). The RTA sales tax rate was increased by 0.25% in Cook County and by 0.50% in the Collar Counties effective April 1, 2008. Proceeds of the sales tax increase in the Collar Counties are divided evenly between the RTA and the county where the tax is collected. The proceeds awarded to Collar Counties can only be utilized for transportation (highways and transit) and/or public safety purposes.
Effective April 1, 2008, the real estate transfer tax (RETT) in the City of Chicago was increased by 0.3% (e.g. $1.50 for every $500 of sales price). While the RETT funds only the CTA, the majority of the new revenue provides funding for CTA, Metra, Pace, and ADA Paratransit operations, as well as for regional innovation, coordination and enhancement (ICE), and suburban community mobility (SCMF) initiatives. Funding levels for ADA Paratransit, ICE, and SCMF are set by statute before the distributions of the remaining balance to the CTA, Metra and Pace. Of this remaining balance the CTA receives 48%, Metra 39%, and Pace 13%.