Live & Shop in Peoria County
What is Live and Shop Peoria County/Grow Peoria County?
Live and Shop Peoria County is a collaborative economic development effort between Peoria County, the City of Peoria, Peoria Area Chamber of Commerce and the Greater Peoria Economic Development Council. Our goal is to encourage residents to shop locally. Our current campaign is called "Grow Peoria County."
Sales tax revenue accounts for a large portion of both the City and County's budget. When sales tax declines, services often have to be cut in accordance. This may include departments such as the Peoria Police Department, Peoria County Sheriff's Office, Peoria Fire Department, Peoria Public Works, and other government functions.
Taxes collected in-store versus on-line are different. For example, if you spend $100 at a store like Running Central in Peoria, Peoria County would receive $.75. By contrast, if you spent $100 at Amazon.com for those shoes, Peoria County would receive $.003. That's a BIG difference!
Tell Me More About In-Store vs. Online Sales Tax
Taxes collected from brick and mortar stores are different than taxes collected from online shopping. When you shop locally at a store, more of your tax dollars stay local. When you shop online, tax dollars go to every municipality in Illinois, plus a few other places.
How Sales Tax is Distributed in the City of Peoria
5.00% - State of Illinois
2.75% - City of Peoria
0.75% - Peoria County
0.50% - Peoria County Schools
*Special sales tax districts, like Westlake Shopping Center, may have an additional tax
How Sales Tax is Distributed Online
80% - State of Illinois
20% - Deposited in State and Local Sales Tax Reform Fund. The fund money is then distributed as below:
- 20% - City of Chicago
- 10% - Regional Transportation Authority
- .6% - Metro-East Mass Transit District
- $3.15 million - Build Illinois Fund
- Remaining balance - distributed to remaining municipal and county governments based on population (including the City of Peoria and Peoria County)
Confused yet? There's more.
There are a couple caveats to online purchases.
1. If the item was shipped from within the State of Illinois, all the taxes are paid to that location. I.e. if your shoes were shipped from Rockford, then Rockford gets all the tax dollars.
2. If you purchase an item with a "pick up in store" option, and the item is picked from the shelf of the store, then our local sales taxes will apply.
3. If you purchase an item with a "ship to store" option, and it is shipped from out of state, the online sales tax formula will apply. If it was shipped from within the State of Illinois, then the first caveat applies.
What is shopping "small"? Why do we promote it?
The U.S. Small Business Administration counts companies with as much as $35.5 million in sales and 1,500 employees as "small businesses", depending on the industry. Outside government, companies with less than $7 million in sales and fewer than five hundred employees are widely considered small businesses.
As for the Grow Peoria County initiative, we focus even smaller. The businesses who typically partner with us on promotions are under 20 employees.
Local Multiplier Effect
Shopping small is important because of the Local Multiplier Effect. According to the American Independent Business Alliance (AMIBA), each dollar you spend at a small business returns an average of 3x more money to your community than spending at a big box store.
Money spent at a small business tends to have a more lasting impact on the local community that money spent at a store that is not owned locally (think national chains). Money spent at a big box store will send the majority of the money out of the community. Money spent at a small business will tend to be reinvested in the community through employee paychecks, inventory, donations, and spending at other local businesses.
What about chain restaurants that are operated by a local owner? Again, according to the AMIBA, the multipier effect will fall in the middle of the two. Not quite as much of an impact as a small business, but not as much money leaves the community as a chain owned and operated by the corporation.
Grow Peoria County Logos
Shopping Local Supports Local Services
By: Mary Ardapple, former Peoria County Board member
Not only is shopping local vital to the local economy, it is also essential to delivering local government services. That's why Peoria County and the City of Peoria have partnered on "Live and Shop Peoria" and "Live and Shop Peoria County" campaigns. The retail sales tax we pay when we make a purchase at a local store has a huge impact on local government revenues. For every $100 spent on general commodities in unincorporated Peoria County, you pay $6.75 in sales tax. Of that total, $1.75 is returned to Peoria County government. For the same $100 spent at a business in the City of Peoria, the total sales tax paid is $8.25 (with the exception of some special zones, in which an extra sales tax is applied). Of that $8.25, the City keeps $2.50, while $0.75 goes to Peoria County.
Every online purchase we make that could have been made at a local store decreases the amount of sales tax revenue both governments have available to deliver basic and critical services. Approximately $16.3 million - or 36% of Peoria County's general revenues - are obtained through sales taxes. Likewise, nearly 24% of the City of Peoria's total revenue comes from sales tax. This is significant, considering that sales tax revenues are used to help provide vital services: law enforcement, fire protection, road maintenance, snow removal, code enforcement and record keeping, among many other public services.
Another reason to shop local is the local multiplier effect. Local small businesses will more often utilize the services of other small businesses in the community; this re-circulation of money is a little-known, yet extremely valuable feature of our local economy. As this money passes through more hands in the local economy, more and more people locally benefit from it. One million dollars, entering the local economy and circulating 10 times, acts like $10 million - increasing revenue and income opportunities for other local businesses.
However, money in the local economy stops circulating at the point a purchase is made outside of it. Buying online, for example, ultimately exports consumer dollars outside of Peoria. One million dollars spent in this way derives only a one-time use of such funds in the local economy, rather than several million.
Therefore, Peoria County and the City of Peoria are encouraging residents to buy local and shop where they live - keeping dollars in the local community and supporting the local services from which all of us benefit.