January 18, 2018

Naperville Phone, Hotel Taxes Could Rise

In an effort to help prevent a property tax increase the Naperville, city council is considering raising the telecommunications tax from five percent to six percent and raising the hotel and motel tax from 4.4 to 5.5 percent.

The hotel and motel tax is also being expanded to include online rentals through services like Airbnb and VRBO.

Councilwoman Patty Gustin said there would be benefits to the new rule in addition to increased income.

“It seems to me like another tool to identify what online rental, Airbnb or whatever others, what we have in the community,” she said.

City staff said the state of Illinois and other municipalities impose taxes on online rentals.

Those taxes are on the renter and not directly on the company, but discussion on taxing the online rentals led to conversation among council members about whether it would be possible to tax other online sales without locations in the city, such as amazon.

“We don’t have a level playing field between the internet and the more and more empty storefronts we’re going to be seeing, and we need to make sure that we can collect our fair share,” said Councilwoman Becky Anderson.

“The only way municipalities will be getting those revenues is through some sort of legislation, so we need to get it done,” Mayor Steve Chirico said.

City attorney Michael DiSanto said getting that passed could prove difficult.

“Mayor, I have not heard of anybody being effectively able to do that, but we can take a look and report back,” he said.

City Manager Doug Krieger said the city misses out on about $3 million in taxes from online business every year.

No action was taken on the possible increases.

Naperville News 17’s Beth Bria reports.

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