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TO: Mayor Richard C. Irvin
FROM: Martin S. Lyons, Chief Financial Officer/City Treasurer
DATE: September 10, 2019
SUBJECT:
An Ordinance Amending the Tax Rate for Aurora Business District No. 1 (Pacifica Square Business District) (City of Aurora - 19-0596 / NA21/2-19.091-MISC - TD - Ward 10.
PURPOSE:
The new Business District for Pacifica Square was approved at the August 27, 2019 City Council Meeting. The Ordinance designating the district included a 1.0% tax to be levied, which is the maximum. The Developer has requested that the tax be set at .25% initially and this amendment will change the ordinance in time to be filed by October 1, 2019 and allow for collections starting January 1, 2020.
BACKGROUND:
The process for adopting/designating a business district is provided in Attachment 1, the Ordinance approving the Business District for Pacifica Square.
DISCUSSION:
The new Business District for Pacifica Square was approved at the August 27, 2019 City Council Meeting. The Ordinance designating the district included a 1.0% tax to be levied, which is the maximum. The Developer has requested that the tax be set at .25% initially and this amendment will change the ordinance in time to be filed by October 1, 2019 and allow for collections starting January 1, 2020.
As can be seen in Attachment 1, the cover memo for this final approval noted that the local Business District (sales) tax can be set at an amount up to 1.0%. The ordinance language specified 1.0%. Historically, most cities have found that it is easier to reduce a tax than it is to raise a tax over time. In that light, the ordinance language stated the tax at 1.0%. As noted above the developer has requested, and since there is sufficient time, the City can agree to set the tax at .25% for the initiation of the Business District. This tax can be adjusted semi-annually through notification (via Ordinance) to the Illinois Department of Revenue by April 1, or October 1 of each year.
IMPACT...
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