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TO: Mayor Thomas J. Weisner
FROM: Brian W. Caputo, Chief Financial Officer/City Treasurer
DATE: March 2, 2016
SUBJECT:
An Ordinance Amending Chapter 44, Article VII, Entitled "Privilege Tax on Service of Food or Alcoholic Liquor or the Sale of Alcoholic Liquor at Retail" of the Aurora Code of Ordinances.
PURPOSE:
To obtain the City Council's approval of certain changes to the City Code pertaining to the municipal food and beverage tax.
BACKGROUND:
Since at least 1969, the city has imposed a local tax on the retail sale of alcohol and prepared food. The tax is collected by liquor and food establishments (such as, but not limited to, restaurants) from retail purchasers and remitted to the city. Since 2005, the "food and beverage tax" has been imposed at a rate of 1.75%. In 2006, a separate rate of 2.75% was imposed on the sale of packaged liquor.
The food and beverage tax is locally administered. That is, local retailers collect the tax from customers and remit it directly to the city, rather than to the Illinois Department of Revenue.
The chapter of the City Code applicable to the food and beverage tax, chapter 44, provides general procedures for administering the food and beverage tax collection system, including auditing local retailers.
DISCUSSION:
The Finance Department has gained substantial experience in collecting food and beverage taxes and conducting audits of tax remitters. The experience of the past several years suggests that certain changes in the portions of the City Code pertaining to the food and beverage tax would be useful to improve the efficiency and effectiveness of collection. Those changes are contained in the attached, proposed ordinance. The more significant changes are summarized below.
General. Empowers the City Treasurer or his designee (in addition to the Mayor) to manage the tax collection and enforcement process. This recognizes the practical reality of which city officials are actuall...
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