Tinley Park will increase a sales tax and an amusement tax that largely falls on concertgoers, although the hikes won’t take effect until Jan. 1.
The Village Board voted Tuesday to increase the home-rule sales tax rate and amusement tax come after village officials last month approved implementing a 1% grocery tax that will take effect Jan. 1.
The home-rule sales tax, now at 0.75%, will increase to 1% and the amusement tax, now at 5%, will increase to 6%.
The amusement tax is largely felt by people attending concerts at the Credit Union 1 Amphitheatre, although the village is expanding the definition of ticketed events covered by the tax to other venues.
“It’s not as much as a direct burden on residents,” said Hannah Lipman, assistant village manager.
The home-rule sales tax was put in place in 2014 and was done, according to the village, to “rebalance revenue” after it became apparent expenses would soon overtake revenue.
Tinley Park is now in a similar position, officials said, and that the village’s General Fund — which pays for many municipal services — had a $3 million deficit, prompting the village to dip into reserves to cover the shortfall.
The village said that while it has healthy reserves, or money set aside to cover shortfalls between revenue and expenses, “utilizing the reserves to fill the gap is acceptable but should not become annual practice.”
The home-rule sales tax is paid by about half of the people patronizing Tinley Park businesses, according to the village.
The home-rule tax doesn’t apply to purchases of groceries or pharmaceuticals.
The increase is projected to generate an additional $2.7 million in revenue annually, according to the village.
Lipman said at a Monday meeting that even at 1%, Tinley Park’s home-rule sales tax rate “still keeps us at the low end” of similar communities with the tax.
Frankfort and Lockport have 1% home-rule sales tax rates, while the rate is 1.25% in Oak Lawn and Orland Park, officials said.
The village said the last increase in the amusement tax was in 2017, when it was increased to 5% from 4%. That increase was done to provide more money for village tourism and branding efforts.
The village said it gets about $1.5 million a year from the tax and it’s estimated the increase would boost that to $3 million annually.
The ordinance expanding the tax to other venues states that it is intended to “clarify the definition to include additional entities who offer amusements.”
Lipman said the expanded or clarified definition would apply only to ticketed events, and would exclude village events or school sports or music productions where tickets might be sold. Also exempt would be nonprofits such as the American Legion or Veterans of Foreign Wars post, she said.
Lipman said the expanded tax could apply to events at the village’s convention center.
Regarding the grocery tax, more than 160 comunities have adopted a replacement tax since the law eliminating the state tax was enacted last summer.
Apart from Tinley Park, that has happened in Markham and Oak Lawn.
The village estimates the elimination of the 1% state tax would cost the village about $3 million annually in lost revenue.
Tinley Park officials said without the new grocery tax there would be significant cuts to the budget, reflected in layoffs and reduction of village services.
The village said money from the existing state tax helps pay for services such as fire, police and public works.
Gov. JB Pritzker signed a bill last year repealing the state’s 1% grocery tax, saying it hit poorer families harder. But the bill also allowed municipalities, which depend on the revenue, to implement their own tax.
Tinley Park’s sales tax rate is now 9.75%, excluding the new grocery taxes or increases approved by the board.
The post Tinley Park trustees vote to raise sales, amusement taxes, a month after approving grocery tax first appeared on Voxtrend News.