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updated: 5/2/2014 5:19 AM

Why West Dundee will collect sales tax after Target leaves

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  • The West Dundee Target closes Saturday, but the village will continue collecting its sales tax for the next three months. That's due to a three-month lag between when a business submits sales tax to the state and when the state sends it back to the municipality.

       The West Dundee Target closes Saturday, but the village will continue collecting its sales tax for the next three months. That's due to a three-month lag between when a business submits sales tax to the state and when the state sends it back to the municipality.
    Christopher Hankins | Staff Photographer

 
 

The West Dundee Target closes Saturday, but sales tax revenue from the store will continue flowing to the village through August.

That's because it takes time for the state to process sales tax dollars before turning them over to the village, officials said.

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Businesses have 30 days to report and pay sales tax to the state, Village Manager Joe Cavallaro said. The state in turn, pays the village 60 days after that.

"There's just a three-month lag," Cavallaro said.

Target contributes about $300,000 in annual sales tax revenue to West Dundee. A month-by-month breakdown is not available, Cavallaro said.

Target, one of the village's biggest sales tax revenue sources, has been in the village since 1994.

In January, Target announced it was closing several poorly performing stores nationwide. The West Dundee store employs about 100 people and those who meet the company's transfer policy requirements could transfer to nearby Targets and work similar jobs.

Clearance sales are underway with all items, with the exception of electronics, at least 30 percent off.

In April, the village board approved a new 2-cent per-gallon gasoline tax and a 1 percent tax on food and beverages to offset the money the village will lose from Target's closure.

Combined, those measures, effective June 1, are expected to collect $450,000 a year, according to the village.

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