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TO: Mayor John Laesch
FROM: Chris Minick, Chief Financial Officer/.City Treasurer
DATE: June 30, 2025
SUBJECT:
Seeking a Motion to approve an Ordinance amending Article 44 Section 191 of the Municipal Code, "Hotel Occupancy Tax"
NOTE: Changes have been made since COW meeting. They are attached as "Hotel Tax Changes Since COW." Clean and Redline versions are in the attachments section.
PURPOSE:
Seeking a Motion to Amend the Hotel Occupancy Tax portion of the Municipal Code. The changes sought are to increase the rate of the tax from 3% to 6% and to impose a flat $10 charge for the privilege of occupying a hotel room in the event that no cash charge is levied for the privilege. .
BACKGROUND:
The City currently levies a tax for the privilege of renting a hotel room in the City limits. The rate of tax imposed is 3% of the amount of the room rental charge. Hotel operators collect the tax from their patrons and remit the proceeds to the City on a monthly basis. The City supports the operations of Aurora Area Convention and Visitor's Bureau via an operating and services agreement. The City makes a financial contribution of support from the proceeds of the Hotel Occupancy Tax in accordance with the terms of that operating agreement. The level of support is in the amount of $225,000 annually.
DISCUSSION:
Hotel Occupancy Taxes are common in Illinois municipalities. The City began levying the tax in the late 1980's and the rate has not been adjusted in some time. The rate is now at the lower end of the spectrum compared to area municipalities. Rates of 5% and 6% are common in the area; staff has attached an analysis of the rates charged in regional communities. Staff is proposing an increase in the rate to generate additional revenue for the City. Proceeds would inure to the benefit of the General Fund.
Currently, the Hotel Tax generates approximately $550,000 on average each year. Increasing the rate to 6% would double the amount of the revenue...
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