Schaumburg toughens rules on internet auto sellers

Schaumburg officials have toughened and clarified regulations on internet auto sellers' storage and display of their vehicle inventories.

Village Trustee Jack Sullivan said the newly approved law was first proposed to the planning, building and development committee he chairs by village staff members who recognized a growing presence of such sellers.

"It wasn't about one particular example," Sullivan said. "It's becoming a bigger business. ... I think they just want to stay ahead of it."

Community Development Director Julie Fitzgerald said the village staff began about a decade ago to see occasional examples of an auto body shop fixing up a car it would then sell. More recently, several vehicles would be spotted together with price tags in their windows in multitenant parking lots.

"We told them they looked like an auto dealership," she said.

While a traditional dealership uses its own land for vehicle storage and display, the main intent of the new law is that an internet auto seller doesn't unfairly occupy someone else's land.

The regulations approved this week limit any business activity - including vehicle storage - to the inside or rear of an internet auto seller's building.

Free-standing buildings can store up to five vehicles that are screened from the roadway, while multitenant buildings can store only two vehicles in this way.

The law also dictates that no multitenant building can house more than one such seller, no advertising to visit the showroom is allowed, and any customer visits to the site must be by appointment only.

These zoning rules will have no impact on consumers or their ability to buy a vehicle via the internet from a Schaumburg-based business, but they will also help ensure such sales generate taxes for the appropriate government agencies.

Identified internet auto sellers based in Schaumburg are responsible for the same total 7.25 percent sales tax as any traditional dealership, Finance Director Lisa Happ-Petersen said.

One of the biggest issues involved in taxing internet transactions is the point of sale be properly identified.

Schaumburg's new law requires internet auto sellers to comply with all regulations of the Illinois secretary of state's office and to obtain a state dealers license.

Any internet auto seller identifiable enough to apply the new zoning regulations to would also be recognized as a Schaumburg business for tax purposes, Fitzgerald said. Auto sales in Schaumburg generate a 5 percent sales tax for the state, 1 percent for the village, 1 percent for the RTA and 0.25 percent for Cook County.