New tax expected to raise $700,000 per year for Libertyville
A much-discussed 1 percent "places for eating tax" in Libertyville will become effective Oct. 1.
Libertyville officials Tuesday formally approved the new tax, with conditions, to be added to sit-down food and beverage bills. For example, a $20 tab will increase to $20.20.
The action came with little comment and incorporated suggestions, such as setting an end date, raised previously. For the near future, it ends talk of a general sales tax boost that would require voter approval.
"I'm happy to see we've incorporated a number of things that came out in public meetings," said Trustee Rich Moras, who chairs the board's finance committee.
Through the process, business owners appeared more concerned with how the measure surfaced and how the tax would be collected more than the amount to be added to bills or general impact.
"I don't expect it will affect our overall business at all," Brian Grano, owner of the popular Mickey Finn's Brewery, said recently.
Kyle Cashman and Christi Lane of O'Toole's of Libertyville were the only restaurateurs to attend Tuesday's meeting. Cashman said he was happy the village would waive fees to collect the tax on its behalf. However, he thought a general sales tax bump, rather than a tax targeting restaurants, was in order.
"I think I'm OK with this as long as everybody pays their fair share down the road," Cashman said. "We feel we got a little hoodwinked. Why us?"
The new tax is expected to raise $700,000 annually. Because it is not a home-rule community, Libertyville has limited ways to raise new revenue without going to voters. Possibilities like an amusement or installing parking meters, for example, were rejected.
The approved law will end April 30, 2018, but can be extended. Other provisions limit the tax to 1 percent; allow merchants to file manually or electronically; and exclude units of local government that sell prepared food at their facility, whether directly or by a third party under contract.
"Places for eating" is defined as an establishment with seating to allow patrons to eat food sold there. It includes restaurants or drive-in restaurants, buffets, bakeries, banquet halls, fast-food outlets, coffee and sandwich shops, bars and lounges, ice cream parlors, and hotels, motels and clubs. Catering is also covered, but the tax will be applied only to food delivered in town.
The measure passed 4-1, with Trustee Todd Gaines voting against. He had said he'd prefer seeking voter approval for a general sales tax increase and did not like targeting a particular industry or business.