Tax changes set for Buffalo Grove
The Buffalo Grove village board Monday put into effect changes to three taxes that trustees had discussed in July.
The board implemented a 1 percent food and beverage tax, which originally came up in the July 23 finance committee meeting. The tax will apply only to food prepared for immediate consumption.
The tax, which goes into effect Jan. 1, is expected to bring in about $450,000 annually and offset at least part of the impact when three car dealerships in town leave.
Arlington Nissan and Arlington Chrysler Jeep will be moving to an auto mall in Arlington Heights later this year and into next year. Arlington Toyota and Scion is going to Palatine in 2009. The dealerships had brought in about $1 million in sales tax.
About 100 businesses in town will have to collect the tax on a monthly basis. The village will give a 2 percent discount to businesses who are on time with their collections.
Scott Anderson, the village's finance director, said the tax is prevalent in most neighboring towns and shouldn't have a large impact.
"I don't think we'll be at a disadvantage in any way," Trustee Jeff Braiman said.
The board on Monday also agreed to get rid of vehicle stickers, citing them as an inefficient way to bring in money. There is an average noncompliance rate of 20 percent for vehicle stickers, village officials say.
Trustee Jeff Berman called the move a birthday present for residents on the village's 50th anniversary, making those commemorative stickers the last ones sold in town.
However, the village will likely make up the revenue brought in by stickers through a property-tax increase.
That is a more fair way of collecting the money, according to board members.
Residents with a $500,000 house will break even, Berman said, and those with houses below $500,00 will be paying less than what they are now. Of course, those with houses valued above that point will be paying more.
The village will also not be able to offer a senior discount, as it did with the stickers.
The board also changed the water rate Monday, raising the consumption fee while reducing the flat monthly fee.
Anderson said the changes will allow the village's water fund to break even. The rate last was changed 24 years ago.
"Unfortunately this is long overdue," Braiman said.
In Summary
Buffalo Grove approved three changes that will affect how residents pay out money.
• Food and beverage: The village added a food and beverage tax of 1 percent. In Lake County, the sales tax on such items will be 8.5 percent starting Jan. 1; in Cook County, the tax on prepared food and beverages, including alcohol, will be 9.75 percent.
• Vehicle stickers: The village is stopping its vehicle sticker program. However, that revenue will likely be offset by an increase in property taxes.
• Water: The water rate will increase 33 percent to $2.40 per 1,000 gallons on Jan. 1 from $1.80. The flat rate unrelated to usage will go down 66 percent from $5.50 to $2 a month, however.