CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Conduct the first reading of an ordinance amending Section 3-1-9 of the Naperville Municipal Code - Food and Beverage Tax
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DEPARTMENT: Finance Department
SUBMITTED BY: Raymond Munch, Director of Finance
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
In April 2004, the City exercised its home rule authority to establish a 1% Food & Beverage Tax, which is applied to the purchase of prepared food and beverages sold in restaurants and other establishments throughout Naperville. The City established this tax to fund what is now known as the Special Events and Community Arts (SECA) Grant Program. The SECA Grant Program provides funding for City services to support social and artistic special events, as well as provide supplemental funding to entities that offer cultural experiences for residents and visitors of Naperville. Over time, the Food & Beverage Tax revenue has grown to support other needs, including public safety pensions, social service grants, supplemental support for Naper Settlement and abating property taxes for debt service.
Recent changes in the food and beverage industry have created inequity in the application of the Food & Beverage Tax. Specifically, an industry trend of drive-thru and mobile order pickup establishments has emerged in recent years in response to changing consumer behaviors. These types of establishments are not subject to the current definition of Retail Food Facility and are therefore not subject to the tax. A review of this issue brought to light other inconsistencies that arise from that definition and the resulting application of the Food & Beverage Tax within the community.
The ordinance presented here seeks to amend the definition of Retail Food Facility to establish clear and consistent application of the tax across the food and beverage industry.
DISCUSSION:
The drive-thru concept has been common among the quick-serve restaurant industry for many years. That model histor...
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