CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Waive the first reading and pass the ordinance repealing and replacing Section 3-1-8 (Real Estate Transfer Tax) of Naperville Municipal Code (requires six positive votes)
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DEPARTMENT: Finance Department
SUBMITTED BY: Raymond Munch, Director
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
The process for paying the City’s real estate transfer tax and receiving a tax stamp is one of the only remaining processes in the Finance Department that customers do not have the ability to submit electronically. Customers either come into the Municipal Center to submit their application and pay in-person or they mail the application with a check and a pre-paid return envelope.
The Finance Department began developing an online application process for the real estate transfer tax stamps in early 2024. The online application is in the Tyler Enterprise Permitting & Licensing (EPL) software, which is the same software TED and CSD are using for permits and licenses.
The online process allows customers to electronically submit their documentation, pay via credit card or e-check and then download and print a digital tax stamp that customers attach to their deed rather than adhering a tax stamp sticker to the deed.
DISCUSSION:
The digital tax stamp was originally rolled out in June 2024. However, when the DuPage County Recorder’s Office received the first digital tax stamps, the County denied the digital stamp because the City’s real estate transfer tax ordinance indicates that the stamp shall be “affixed” to the deed, which they interpreted as a sticker. The electronic submittal process was immediately suspended so that Finance and Legal could revise the tax stamp ordinance.
Staff requests the City Council approve an ordinance to repeal and replace Section 3-1-8, Real Estate Transfer Tax, of the Municipal Code. In addition to changing the language to allow tax stamps to be attached rather than having to be affixed/adhered to the deed, the revised ordinance has been generally updated to make the process clearer and more transparent. The revised ordinance does not increase the rate of the transfer tax or add transactions on which the tax is imposed.
A copy of the ordinance amending the municipal code is attached.
In addition to modifying the ordinance to allow digital tax stamps to be attached to a deed, staff has also modified the online tax stamp process based upon feedback we received from customers. The new online process will be re-started in November after DuPage and Will Counties are provided with the new ordinance.
FISCAL IMPACT:
There is no fiscal impact to the City to implement an online real estate transfer tax process.