Ordinance / Privilege Tax
Article VII. Privilege Tax
On the Service of Food or Alcoholic Liquor or the Sale of Alcoholic Liquor at Retail
Section 44-111. Title.
This article shall be known and cited as the city privilege tax upon the purchase of food or alcoholic liquor at a restaurant or liquor establishment and upon the privilege of purchasing alcoholic liquor at retail and the tax imposed in this article shall be known and cited as the city privilege tax upon the purchase of food or alcoholic liquor at a restaurant or liquor establishment and upon the privilege of purchasing alcoholic liquor at retail. (Code 1969, § 44-111)
Section 44-112. Definitions.
For the purposes of this article whenever any of the following words, terms or definitions are used, they shall have the meaning ascribed to them in this section.
Alcoholic liquor is defined in the same manner as the term is defined in section 6-02.
Food item means and includes any and all material, whether solid, semisolid or liquid, used or intended to be used for human consumption and for nourishment of the human body. The term includes any and all nonalcoholic liquor beverages.
Liquor establishment means any premises required to obtain a retail liquor license pursuant to Chapter 6.
Owner means any person having a sufficient proprietary interest in conducting the operation of a restaurant or liquor establishment so as to entitle such a person to all or a portion of the net receipts thereof.
Person means any natural person, receiver, administrator, executor, conservator, assignee, trust in perpetuity, trust, estate, firm, co-partnership, joint venture, club, company, business trust, domestic or foreign corporation, association, syndicate, society or any group of individuals acting as a unit, whether mutual, cooperative, fraternal, nonprofit or otherwise; whenever the term "person" is used in any clause prescribing and imposing a penalty, the term as applied to associations means the owners or part-owners thereof, and as applied to corporations, the officers thereof.
Restaurant means and includes any place kept, used and maintained as a place at which food items are served and/or prepared, and where food items are regularly served and/or prepared, whether or not consumed or intended to be consumed on the premises, but shall not include coin-operated automatic food item dispensing machines. For purposes of this article, luncheon or dinner clubs, employee cafeterias and the like, where food items are prepared or served, are deemed to be restaurants. (Code 1969, § 44-112)
Section 44-113. Imposition of tax.
- There is levied and imposed upon the privilege of purchasing food items or alcoholic liquor served or prepared at either a restaurant or liquor establishment in the city, and upon the privilege of purchasing alcoholic liquor at retail at any liquor establishment in the city, a tax of 1.75% of the purchase price, exclusive of any other tax charged for such food items and/or alcoholic liquor.
- No such tax shall be levied and imposed upon the purchase of a food item which is both purchased and taken from the premises of purchase in the hermetically sealed container of its manufacture or wholesale. (Code 1969, § 44-113)
Section 44-114. Liability for payment.
- The ultimate incidence of and liability for payment of the tax imposed by this article shall be borne by the person who seeks the privilege of purchasing food items or alcoholic liquor served at such restaurant or liquor establishment or the privilege of purchasing alcoholic liquor at retail at any liquor establishment, such person hereinafter referred to as "consumer."
- The tax levied in this article shall be paid in addition to any and all other taxes and charges. It shall be the duty of the owner, manager or operator of every restaurant or liquor establishment to secure the tax from the consumer of a restaurant or liquor establishment and pay the tax over to the city under the rules and regulations prescribed by the mayor and as otherwise provided in this article. (Code 1969, § 44-114)
Section 44-115. Collection.
Every person required to collect the tax levied by this article shall secure the tax from the consumer at the time he collects payment for the service of food or alcoholic liquor or the sale of alcoholic liquor at retail. The amount due under the tax provided in this article shall be stated separately on the invoice receipt or other statement or memorandum of the payment given to the consumer at the time of payment. (Code 1969, § 44-115)
Section 44-116. Rules and regulations.
The mayor of the city may promulgate rules and regulations not inconsistent with the provisions of this article concerning the enforcement and application of this article. The term "rules and regulations" includes, but is not limited to; a case-by-case determination whether or not the tax imposed by this article applies. (Code 1969, § 44-116)
Section 44-117. Filing of return.
The owner of each restaurant or liquor establishment within the city shall file tax returns showing tax receipts received during each monthly period on forms prescribed by the mayor. The returns shall be due on or before the last day of the calendar month next succeeding the end of the monthly filing period. At the time of filing such returns, the owner shall pay to the city all taxes due for the period to which the tax return applies. A commission, as set by section 44-118.1, may be deducted when timely payments are made for taxes due. (Code 1969, § 44-117; Ordinance Number 087-5685, § 1, 07-07, 1987)
Section 44-118. Failure to pay tax.
- If for any reason any tax is not paid when due, a penalty and interest as established by section 44-118.1 on the amount of tax which remains unpaid shall be added and collected, and the amount of commission therein may not be deducted. Whenever any person shall fail to pay any tax as provided in this article, the corporation counsel upon the request of the mayor shall bring or cause to be brought an action to enforce the payment of the tax on behalf of the city in any court of competent jurisdiction.
- If for any reason any tax is not paid when due, and the treasurer issues a notice of tax liability under section 44-125, a penalty of 20 percent of the full amount of tax claimed due, shall be added thereto. (Code 1969, § 44-118; Ordinance Number 087-5685, § 1, 07-07, 1987)
Section 44-118.1. Schedule of certain rates.
The following rates are hereby set for purposes of this article; provided that, the treasurer may from time to time increase or decrease any rate under this article in order to equal those rates set forth from time to time by the Retailers' Occupation Tax Act and Use Tax Acts [Ill. Rev. Stat. Chapter 120, 440 et seq., 439.1 et seq.]:
- Commission, 2.1 percent deducted from the amount of tax due, if payment is made on a timely basis.
- Penalty, 7.5 percent added to the amount of tax unpaid and uncollected.
- Interest, 1.25 percent added per month to the amount of tax unpaid and uncollected. (Code 1969, § 44-118.1; Ordinance Number 087-5685, § 1, 07-07, 1987)
Section 44-119. Records.
- Every owner, manager or operator of a restaurant or liquor establishment in the city shall keep books and records for a period of at least 24 months, unless otherwise authorized by the city, which at a minimum shall include a daily sheet showing:
- The amount of taxable receipts within the 24-hour period;
- The actual restaurant/liquor establishment tax receipts collected for the date in question.
- The mayor or his delegate shall at all reasonable times have full access to such books and records.
- The financial records of any restaurant or liquor establishment submitted pursuant to this article or any rule and regulation promulgated hereunder shall not be available for public inspection in order to protect the owners' right to privacy. (Code 1969, § 44-119)
Section 44-120. Exemptions.
The tax imposed under this article shall not apply to or be imposed upon those organizations, which are exempt from State of Illinois sales tax. (Code 1969, § 44-120; Ordinance Number 000-130, § 1, 10-10-2000)
Section 44-121. Suspension or revocation of licenses for failure to pay tax; hearing.
If the mayor or other city official responsible for the issuance of a city license, permit or other approval, including, but not limited to, a liquor license, after hearing held by or for him, shall find that any person has willfully evaded payment or collection and remittance of the tax imposed by this article, he may suspend or revoke such city license, permit or other approval held by such tax evader. The person shall have an opportunity to be heard at such hearing to be held not less than 7 days after notice is given to him of the time and place of the hearing to be held, addressed to him at his last known place of business. Pending said notice, hearing and finding, any license, permit or other approval issued by the city to the person may be temporarily suspended. No suspension or revocation here under shall release or discharge said person from his civil liability for the payment or collection and remittance of the tax, nor from prosecution for such offense. (Code 1969, § 44-121; Ordinance Number 087-5685, § 1, 07-07, 1987)
Section 44-122. Disposition of proceeds.
All proceeds resulting from the imposition of the tax under this article, including penalties, shall be paid into the treasury of the city, and shall be credited to and deposited in the corporate fund of the city. (Code 1969, § 44-122)
Section 44-123. Penalty.
Any person found guilty of violating, disobeying, omitting, neglecting or refusing to comply with or resisting or opposing the enforcement of any of the provisions of this article, except when otherwise specifically provided, upon conviction thereof, shall be punished as provided in section 1-10. (Code 1969, § 44-123)
Section 44-124. Certificate of registration.
Every restaurant and liquor establishment which must collect and remit the tax under this article shall promptly complete and file a certificate of registration application with the city. The application shall be made on a form prescribed and approved by the finance department for such purpose. The conditions are as follows:
- Every applicant for a certificate of registration shall furnish a financial responsibility bond/deposit, on or before commencing or recommencing operation, to guarantee the payments required by this article, in an amount equal to 3 times the applicant's average monthly tax liability (including the purchase tax liability imposed under section 44-163 or $20,000, whichever is lower, but in no case less than $500 dollars.
- A financial responsibility bond/deposit must be provided in 1 of the following forms: a. Cashier's check made payable to the city; b. Surety bond from a corporate surety in a form acceptable by the city; c. Other form of financial responsibility bond/deposit acceptable if approved by the city in writing.
- Upon receipt of the application in proper form and approval by the finance department of the security furnished by the applicant, the department shall issue to such applicant a certificate of registration, which shall permit the commencement, or continuation of operations thereby. Registrants shall annually renew such applications on or before each 07-01, for record keeping and verification purposes.
- No certificate of registration shall be issued to any applicant who is delinquent or in arrears of any moneys due the city under law for any purposes, including, but not limited to, taxes, fines, penalties, water or license fees; or who is currently in violation of any appropriate and applicable building or fire code.
- Any registrant not affected by subsection (a) of this section shall be required to comply with the requirements thereof if determined to be delinquent for any 2 months during a consecutive twelve-month period.
- If a registrant fails to pay, when due, any payment amount which such security guarantees, the city shall, after such liability is determined by the registrant or the city, convert the security which the registrant has furnished into money for the city, after first giving the registrant at least 10 days' written notice to pay the liability or forfeit such security to the city.
- Any registrant who has, as verified by the city, faithfully and continuously complied with the requirements of this article for a period of 3 consecutive years shall be exempt from the requirement of furnishing a financial responsibility bond/deposit until such time as a delinquency may occur as defined under this article.
- A certificate of registration is nontransferable. Any change of name, owner or partner, or change in the corporate structure (in the case of a corporation), shall require a new certificate. (Code 1969, § 44-124; Ordinance Number 087-5685, § 1, 07-07, 1987)
Cross-references: Alternative to bonds, § 2-318.
Section 44-125. Notice of tax liability; demand for payment of tax; period of limitation; suit.
- In the event any person fails to file a return when and as herein required, or if it shall appear to the treasurer that the amount of any tax payment is incorrect in that it does not include all taxes payable for such calendar period, or if the treasurer shall find that the collection of any taxes which have accrued but are not yet due will be jeopardized by delay, and declares said taxes to be immediately due and payable, or if it shall appear to the treasurer that he had made any final assessment which did not include taxes payable for the periods involved, or if it appears to the treasurer that any person has, by reason of any act or omission or by operation of any law, become liable for any taxes, interest or penalties not originally incurred by him, the treasurer may in any of the above events determine and assess the amount of such taxes or deficiency, as the case may be, together with the interest and penalties due and unpaid. Any such determination and assessment shall be made by the treasurer upon his best judgment and information, and it shall be permissible for the treasurer to show a figure that represents the tax due for any given 6 months instead of showing the amount of tax due for each month separately. The treasurer shall immediately serve notice of tax liability upon such person and make a demand for payment of the tax together with interest and penalties thereon. If the person incurring any such liability has died, such demand may at the discretion of the treasurer be made against his personal representative. Such determination and assessment by the treasurer shall be final at the expiration of 20 days from date of the service of such written notice thereof and demand for payment, unless such person shall have filed with the treasurer a written petition pursuant to section 44-126, specifying its objections thereto.
- The treasurer may amend his determination and assessment at any time before it becomes final. In the event of such amendment the person affected shall be given notice and an opportunity to be heard in connection therewith.
- Except in the case of a fraudulent return or in the case of a willful failure or refusal to file a return when due, or with the consent of the person to whom the notice of the tax liability, assessment or other determination is to be issued, or in the case of any amended return (which a notice of tax liability or assessment may be issued on or after each 01-01 and 07-01 for an amended return filed not more than 3 years prior to each 01-01 or 07-01, respectively), no notice of tax liability, assessment or other determination shall be issued on and after each 01-01 and 07-01 covering the amount of tax due for any month or period of time more than 3 years prior to such 01-01 and 07-01, respectively. Provided, however, that the foregoing limitation upon the issuance of a notice of tax liability, assessment or other determination shall not apply to the issuance of a notice of tax liability, assessment or other determination with respect to any period of time prior thereto in cases where the treasurer has, within the period of limitation then provided, notified the person of the amount of tax computed even though the treasurer has not determined the amount of tax due from such person in the manner required herein prior to the issuance of such notice, but in no case shall the amount of any such notice of tax liability, assessment or other determination for any period otherwise barred by this liability, assessment or other determination for any period otherwise barred by this article exceed for such period the amount shown in the notice theretofore issued.
- Whenever any person shall fail to pay any tax herein provided, the corporation counsel shall, upon the request of the treasurer, bring or cause to be brought, an action to enforce the payment of the tax on behalf of the city in any court of competent jurisdiction. Such action shall be in addition to any other remedy afforded the city under this article or under any other law, including a prosecution for violation of this article. (Code 1969, § 44-125; Ordinance Number 087-5685, § 1, 07-07, 1987)
Section 44-126. Hearings.
- Any person issued a notice of tax liability pursuant to section 44-125, or otherwise aggrieved by any determination of the treasurer made pursuant to this article, shall have the right to seek a redetermination by the treasurer, subject to the provisions stated herein below.
- Any person seeking a redetermination by the treasurer shall file a written petition for redetermination within 20 days after receipt of the applicable notice. The petition must be received by the treasurer or in the treasurer's office prior to the expiration of the twenty-day period, or on the first date the treasurer's office is open for business after such date if closed on such date. Mailing such petition on such date shall be insufficient. If the petition is not filed within this time period, then the determination of the treasurer shall become final and not subject to further review, and the treasurer may proceed with enforcement as provided under this article.
- The petition shall state the reason or reasons why the determination by the treasurer is incorrect or invalid, as the case may be, and state the relief sought from the treasurer. Upon receipt of the petition, the treasurer shall promptly set a time and date for a hearing on the petition and shall notify the petitioner of the same not less than 7 days prior to the date set for hearing. A hearing date may be continued by the treasurer for any reason provided for in this article, or for other good cause. All such hearings shall be held in the office of the treasurer, if feasible.
- At such hearing, the treasurer shall give the petitioner an opportunity to be personally heard and present whatever information or witnesses, as he considers pertinent and relevant to the issue. Upon conclusion of such hearing, and after consideration of any information presented by the petitioner and such other information as may be available to the treasurer, a decision shall be made by the treasurer either canceling, increasing, modifying, or affirming such determination, and notice of such decision shall be given in writing to the petitioner. Such notice shall contain a statement by the treasurer of the cost of the certification of the record computed at the rate of five cents ($0.05) per one hundred (100) words, which cost shall be charged to the petitioner if the determination or assessment is affirmed. The record shall consist of the notices and demands caused to be served by the treasurer, the original determination and/or assessment of the treasurer, the written petition for redetermination, the information and exhibits introduced at such hearing or certified copies thereof, the decisions of the treasurer and such other documents filed in the proceeding.
- The decision of the treasurer reached at the conclusion of such hearing shall be final, and the treasurer may enforce such decision in the manner provided for under this article or such other manner as may be available by law. (Code 1969, § 44-126; Ordinance Number 087-5685, § 1, 07-07, 1987)