A. Definitions:
Certain words or terms herein shall have the meaning ascribed to them as follows:
FACILITATOR: | Any person or entity who provides a means through which a person may book a hotel room and/or transient occupancy rental unit to lessees, regardless of whether payment is transferred through or processed by such facilitator. Facilitators are considered lessors, as used herein. |
GROSS RENT: | The total amount of consideration for occupancy, valued in money, whether received in money or otherwise, including all receipts, cash, credits, and property or services of any kind or nature, including but not limited to, amounts charged for the making, booking, facilitating or servicing of reservations. Gross rent means both (a) the "net rate" paid to the hotel or motel by a Facilitator for room occupancy by the consumer; and (b) the amount retained by the Facilitator for travel-related services provided to the consumer (sometimes referred to as a "facilitation fee"), and any additional amounts retained by the Facilitator as compensation for its services to the consumer for the individual transaction, or, in the instance of a consumer's direct rental of a room with the hotel or motel, gross rent shall mean the amount charged by the hotel or motel directly to the consumer for the occupancy of the room. |
HOTEL: | A structure kept, used or maintained as or advertised or held out to the public to be an inn, motel, hotel, apartment, home, lodging house, dormitory or place where sleeping, rooming, office, conference or exhibition accommodations are furnished for lease or rent, whether with or without meals. For avoidance of doubt, transient occupancy rental units are hotels under this definition. |
LESSEE: | Any person who pays for the privilege of occupying all or part of a hotel. |
LESSOR: | Any person having a sufficient proprietary interest in conducting the operation of a hotel or receiving the consideration for the rental of all or part of such hotel, so as to entitle such person to all or a portion of the net receipts thereof, including facilitators, as defined herein. |
ONLINE TRAVEL COMPANY: | An organization that books, reserves, or rents hotel or motel rooms and makes other travel arrangements for consumers via the World Wide Web, internet or other digital means. Online travel companies are considered facilitators, as used herein. |
PERMANENT RESIDENT: | Any person who has occupied or has the right to occupy all or part of a hotel for more than (30) consecutive days. |
PERSON: | 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 shall mean the owners or part-owners thereof, and as applied to corporations, the offices thereof, or any other entity recognized by law as the subject of rights and duties. |
TRANSIENT OCCUPANCY RENTAL UNIT: | A dwelling unit or a habitable unit that is offered, in whole or in part, for rent, lease or hire that is rented, leased or hired for which a lessor receives consideration from a person for a period of thirty (30) days or less and that person has the right to use, occupy or possess all or part of the dwelling unit or habitable unit for said period. |
B. Hotel Use Tax Imposed:
1. There is levied and imposed a tax of five percent (5%) of the gross rent charged for the privilege and use of renting a hotel room within the City for each twenty-four (24) hour period or any portion thereof for which a room charge is made.
2. Accommodations within said buildings or structures which are leased to the same occupant for a period of more than thirty (30) consecutive days shall be exempt from the tax provisions of this article.
3. Lessors renting or leasing hotel rooms within the City are required to collect the hotel use tax; however, the ultimate incidence of any liability for payment of the tax is to be borne by the lessee.
4. The hotel use tax shall be paid in addition to any and all other taxes and charges.
5. It shall be the duty of every lessor of every hotel within the City to separately state such tax at the five (5) percent rate upon the total amount of compensation charged for the use of the hotel. The lessor shall also state separately the amount of tax on the invoice for the transaction that will be tendered to the Lessee.
6. It shall be the duty of every lessor of every hotel within the City to collect the tax from the lessee at the time the lessee pays for the privilege of occupying all or part of a hotel transient occupancy rental unit, and to remit to the City the tax under procedures provided for in this chapter or otherwise prescribed by the City. If more than one person is the lessor as related to a particular transaction, the lessors are jointly and severally responsible for collecting and remitting the tax.
7. It shall not be a defense to this ordinance that the lessor is not licensed by the City to rent hotels and the lessor will still be required to remit the proper tax to the City.
8. All funds collected by the City under this tax shall be expended solely to promote tourism and conventions within the City or otherwise to attract nonresident overnight visitors to the municipality. No funds received under this tax shall be used to advertise for or otherwise promote new competition in the hotel business within the City.
C. Rules and Regulations: The City Treasurer may promulgate rules and regulations not inconsistent with the provisions of this chapter concerning enforcement and application of this chapter. The phrase "rules and regulations" includes, but is not limited to, case-by-case determination of whether or not the tax imposed by this chapter applies.
D. Transmittal Of Tax Revenue:
1. The lessor of each hotel within the City shall file returns and remit collected taxes, to the Finance Department showing tax receipts received with respect to each hotel during each monthly period commencing on May 1, 2021 and continuing on the first day of every month thereafter on forms prescribed by the City. The return shall be due on or before the tenth day of the calendar month succeeding the end of the monthly filing period. Each lessor shall file an application with the city clerk for a city taxpayer Identification Number prior to filing its first tax return.
2. The first taxing period for the purpose of this chapter shall commence on May 1, 2021; and the tax return and payment for such period shall be due on or before June 10, 2021. Thereafter, reporting periods and tax payments shall be in accordance with the provisions of this chapter. At the time of filing such tax returns, the owner shall pay to the City all taxes due for the period to which the tax return applies.
E. Disposition Of Hotel Tax Funds: All hotel tax revenue derived under the provisions of this section shall be kept in a separate fund held by the city and used only for the purpose of promoting meetings, tourism, conventions or other projects and events within the city, or otherwise to attract nonresidents to visit the city and to patronize all businesses, as set forth in this chapter. No funds received pursuant to this section shall be used directly to advertise or otherwise promote new competition in the hotel business. The hotel tax funds collected shall be used as follows:
1. Promotional Grants: The city council shall budget and expend a sum not to exceed forty-two and one-half percent (42.5%) of the annual hotel tax revenue to be used for promotional grants as recommended by the tourism board as set forth below.
2. Police Services: The city council shall budget and expend a sum not to exceed forty-two and one-half percent (42.5%) of the annual hotel tax revenue to be used for the hiring and compensation of police officers and the purchase of related police department equipment for the purpose of providing police services in the tourism zone.
3. Beautification And Road Repair: The city council shall budget and expend a sum not to exceed fifteen percent (15%) of the annual hotel tax revenue to be used for the beautification of streetscapes and the repair of roads in the tourism zone.
4. Reserve Account For Promotional Activities: The balance of the funds derived from hotel taxes shall be placed in a reserve account and spent on promotional activities as determined by the city council upon the recommendation of the tourism board.
F. Tourism Board:
1. Creation: There is hereby created the Prospect Heights tourism board.
2. Purpose: The purpose of the tourism board is to promote and encourage tourism to area hotels, motels, restaurants and businesses by reviewing applications for tourism grants from tourism zone businesses and recommending expenditure of hotel tax funds on said grant applications.
3. Members: The tourism board shall consist of five (5) members appointed by the Mayor with the advice and consent of the City Council. At least two (2) members shall be owners, operators or otherwise employed by hotels within the tourism zone.
4. Rules And Meetings:
a. The tourism board shall establish a schedule of meetings, rules of procedure and rules governing its conduct and the application process and criteria for tourism grants.
b. A quorum for the transaction of all business by the board of directors shall be necessary and shall consist of three (3) members being physically present.
c. Each member must be present to vote on any matter before the board of directors. The act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors unless a greater number is required by statute or these bylaws.
d. All meetings are subject to the Illinois open meetings act.
5. Officers And Duties:
a. At the beginning of the city's fiscal year, currently May 1, the tourism board shall elect a chairperson and a secretary.
b. Upon resignation or incapacity, of either the chairperson or secretary, the members shall elect a replacement to serve the balance of the term.
c. The chairperson shall preside over all meetings. He or she also shall assume all duties incident to the office as may be prescribed by the members.
d. The secretary shall keep minutes of all meetings and a record of all actions of the tourism board.
e. The members shall receive no compensation for service but may be reimbursed for actual expenses incurred with regard to tourism board business.
G. Tourism Zone: There is hereby established the Prospect Heights tourism zone. The purpose of the tourism zone shall be to promote and encourage tourism to area hotels, motels, restaurants and businesses. The boundaries of the tourism zone shall be as set forth on the map attached to the ordinance codified herein and incorporated as exhibit A.
H. North Shore Convention And Visitors Bureau: The city shall join the North Shore Convention And Visitors Bureau and shall maintain membership in good standing until further action of the city council. The City Council shall budget and expend sufficient funds from hotel tax revenue to pay all membership fees and dues associated with its membership in the bureau. The City Administrator is authorized to take all steps to carry out the purposes of this subsection.
I. Tourism Grants: The City Council may make grants to businesses in the tourism zone for the purpose of promoting meetings, tourism, conventions or other projects and events within the city, or otherwise to attract nonresidents to visit the city and to patronize all businesses, as set forth in this chapter. Grants shall be approved by the city council upon the recommendation of the tourism board, provided that there are sufficient funds available in the tourism grant portion of the annual budget and that the proposed grant comports with the purposes of this section. Persons awarded a tourism grant shall provide such reports and access to books and records as may be required by the City Administrator to ensure that grant funds are being used for proper tourism grant purposes. Transient occupancy rental units are not eligible to receive tourism grants.
J. Late Payment and Penalties:
1. Any notice, payment, remittance or other filing required to be made to the City for the tax imposed by this article shall be considered late unless it is (a) received by the City on or before the due date imposed by this article, or (b) received via a method consistent with the current established standards of filing and payment determined by the City.
2. In the event a determination has been made that a tax is due and owing, through audit, assessment or other bill sent, the tax must be paid within the time frame otherwise indicated.
3. Interest. The City hereby provides for the amount of interest to be assessed on a late payment, underpayment or non-payment of the tax, to be one percent (1%) per month, based on a year of three hundred sixty five (365) days and the number of days elapsed. However, the total amount of such interest shall not exceed five hundred dollars ($500.00) for any one (1) late filing period payment.
4. Late filing and payment penalties.
a. If a tax return is not filed within the time and manner provided by the controlling tax ordinance, a late filing penalty of five percent (5%) of the amount of tax required to be shown as due on a return shall be imposed; and a late payment penalty of five percent (5%) of the tax due shall be imposed.
b. If no return is filed within the time or manner provided by the controlling tax ordinance and prior to the City issuing a notice of tax delinquency or notice of tax liability, then a failure to file penalty shall be assessed equal to twenty five percent (25%) of the total tax due for the applicable reporting period for which the return was required to be filed.
c. A late filing or payment penalty shall not apply if a failure to file penalty is imposed by the controlling ordinance.
K. Other Actions Authorized: The officers, employees and/or agents of the City shall take all action necessary or reasonably required to carry out, give effect to and consummate the amendments contemplated by this ordinance and shall take all action necessary in conformity therewith. The officers, employees and/or agents of the City are specifically authorized and directed to draft and disseminate any and all necessary forms to be utilized in connection with these amendments. Any and all actions previously performed by officials, employees and/or agents of the City in connection with carrying out and consummating the intent of this ordinance are hereby authorized, approved and ratified by this reference. (Ord. O-21-06, 3-22-2021)