Lake in the Hills imposes new amusement tax

Watching a movie at the theaters in Lake in the Hills will cost a little bit more next year.

Starting Jan. 1, the village is imposing a 5 percent amusement tax to offset declining revenues from other sources.

The village board recently adopted the ordinance by a 4-2 vote. Trustees opposing it cited competition from neighboring communities and residents' ability to afford fun, family-oriented activities as reasons not to impose the tax.

It affects businesses that provide non-participative amusement activities - so far only the AMC 12 movie theaters off Randall Road. Currently, the village receives sales tax revenue from theater concessions, but does not get any portion of the revenue from ticket sales or admissions.

Officials anticipate roughly $200,000 in new revenue from the tax in fiscal year 2017. They hope it will help offset an estimated $78,000 revenue loss from the elimination of a red-light camera at Randall and Acorn roads, and an expected $310,000 revenue loss from the consolidation of the village's dispatch center.

These revenue sources have allowed the village to levy a flat or reduced property tax for the past six years.

"And we're planning for a seventh in 2017. We are anticipating a flat levy," interim Village Administrator Jennifer Clough said.

She added, these types of activities generally are discretionary for consumers and attract residents and nonresidents.

Groups exempt from the new tax include religious, charitable, labor, fraternal, educational, and veterans' organizations, as well as nonprofits, park districts, school districts, and other local government agencies.

Business owners could pass on the cost to consumers. The tax is applied to gross receipts, including all fees such as admission, membership, use, cover, or service charges. The business is allowed to keep a 1 percent commission of taxes as reimbursement for expenses incurred in the administration of the tax, per village documents.