Re: Since Granite City is the subject of interest .. Archived Message
Posted by Riverbender  on December 29, 2019, 2:24 am, in reply to "Since Granite City is the subject of interest .."
Home rule has a number of uses, however, it is most commonly used to generate
revenue through its broad taxation powers. Home rule units can constitutionally tax
anything that is not income, occupations or earnings. With few exceptions, governing
bodies of home rule units do not need to ask voter approval when instituting home rule
taxes. The following list is not meant to be exhaustive, but rather reflects the most
commonly used home rule taxes.
• Home Rule Taxes
• Municipal Retailers and Service Occupation Taxes are passed concurrently
at .25% increments with no maximum limit. They are basically a sales tax that
applies to qualifying food, drugs, and medical appliances. Neither applies to
merchandise that requires title or registration.
• The Hotel/Motel Tax, although not exclusive to home rule units, is allocated
differently depending on a unit’s home rule status. The revenue from a home
rule hotel/motel tax may be applied to any public purpose while a non-home
rule hotel/motel tax can only be used to promote over-night tourism and is
limited by a 5% cap.
• A home rule Gasoline Tax is in addition to the federal tax of $18.4 cents/
gallon and the State tax of $.19/gallon plus the state 6.25% sales tax.
• A Use Tax is a tax on all tangible property that is registered with the State. For
example, new or used cars, boats or other vehicles.
• Cigarette Taxes were recently pre-empted by the State but those home rule
units that already had imposed Cigarette Taxes were grandfathered in.
• Property Taxes are imposed by both home rule and non-home rule units.
However, non-home rule units can only extend property taxes 5% or the rate of
inflation, whichever is less. If a non-home rule units wants to go beyond the
cap, it must be approved by referendum. Home rule units are not susceptible to
the tax cap.
• Home Rule Taxes That Must Be Passed With Referendum
• A Real Estate Transfer Tax is a tax on the privilege of transferring title to real
estate or a beneficial interest in a land trust. The State rate is $.50/$500 of
property value. Counties have a rate of $.25/$500 of property value. Home
rule units may place an additional local real estate transfer tax, however, voters
must pass a referendum prior to this tax being imposed.
• Grey Area
• A Food and Beverage Tax is a tax above and beyond the sales tax. It is
unclear whether this tax is only applicable to home rule units. For example,
Lombard, a municipality that repealed home rule in 1981, recently imposed a tax
on eating establishments based on 65 ILCS 5/11-42-5 which authorized
municipalities to “license, tax, and regulate all places for eating or amusement.”
Lombard’s tax authority has not been questioned.
• An Amusement Tax has a very broad application pertaining to all places for
“amusement”, for example, movie theatres. Like the Food and Beverage Tax,
65 ILCS 5/11-42-5 makes it unclear whether it applies strictly to home rule
units. Villa Park and Cicero, both municipalities that do not have home rule,
have amusement taxes.
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