ORDINANCE NO. MC-3-2014

AN ORDINANCE AMENDING TITLE 4 OF THE WINNETKA VILLAGE CODE TO ESTABLISH A TAX ON THE USE OF NATURAL GAS IN THE VILLAGE OF WINNETKA

WHEREAS, the Village of Winnetka (“Village”) is a home rule municipality in accordance with Article VII, Section 6 of the Constitution of the State of Illinois of 1970 and, pursuant thereto, has the authority, except as limited by said Section 6 of Article VII, to exercise any power and perform any function pertaining to the government and affairs of the Village, including the power to regulate for the protection of the public health, safety and welfare, and the power to tax; and

WHEREAS, on March 18, 2003, pursuant to Section 8-11-2 of the Illinois Municipal Code, 65 ILCS 5/8-11-2, the Council of the Village of Winnetka (“Village Council”) passed Ordinance MC-4-2003, which added Chapter 4.22 to the Winnetka Village Code, titled “Gas Distribution Occupation Tax,” to authorize a 5% tax on the gross receipts received by persons engaged in the business of distributing, supplying, furnishing, or selling gas for use or consumption within the corporate limits of the Village of Winnetka; and

WHEREAS, the Gas Distribution Occupation Tax applies to persons engaged in the business of distributing, supplying, furnishing or selling gas for use or consumption within the Village, but not for resale; and

WHEREAS, revenues from the Gas Distribution Occupation Tax have been in decline due to an increase in gas purchases from businesses that distribute, supply, furnish or sell gas from outside the Village, which are not subject to Gas Distribution Occupation Tax; and

WHEREAS, in furtherance of its home rule powers, the Village Council finds and determines that it is necessary and desirable for the Village Council to amend the Village Code regarding taxation by creating a Municipal Gas Use Tax; and

WHEREAS, this Ordinance has been placed on the Village Council’s agenda and made available for public inspection at Village Hall and on the Village’s web site, in accordance with Sections 2.04.040 and 2.16.040 of the Winnetka Village Code and applicable law.

NOW, THEREFORE, be it ordained by the President and Board of Trustees of the Village of Winnetka, as follows: 

SECTION 1:   The foregoing recitals are hereby incorporated as the findings of the Council of the Village of Winnetka, as if fully set forth herein. 

SECTION 2:   Title 4 of the Winnetka Village Code, “Revenue and Finance,” is hereby amended by adding a new Chapter 4.23, which shall be titled “Municipal Gas Use Tax,” and shall provide as follows:

Chapter 4.23
Municipal Gas Use Tax

Sections:

4.23.010   Definitions.

4.23.020   Municipal Gas Use Tax Imposed.

4.23.030   Effective Date of Tax.

4.23.040   Collection of Tax by Public Utility.

4.23.050   Taxpayer’s Books and Records.

4.23.060   Effect of Local Taxpayers’ Rights and Responsibilities Ordinance.

Section 4.23.010      Definitions.

As used in this chapter, the following terms, words and phrases shall have the meaning given in this section:

   “Municipal Gas Use Tax” means the tax established pursuant to this chapter and imposed on retail purchasers who purchase gas for use or consumption within the corporate limits of the Village.

   “Person” means any individual, firm, trust, estate, partnership, association, joint stock company, joint venture, corporation, limited liability company, municipal corporation or political subdivision of this state, or a receiver, trustee, conservator or other representative appointed by order of any court.

   “Public Utilities Act” means the Public Utilities Act as amended, from time to time (220 ILCS 5/1-101 et seq .).

    “Public utility” means a public utility as defined in Section 3-105 of the Public Utilities Act.

   “Retail purchaser” means any person who purchases gas in a sale at retail.

   “Sale at retail” means any sale of gas by a gas retailer to a person for use or consumption, and not for resale. For this purpose, the term “retailer” means any person engaged in the business of distributing, supplying, furnishing or selling gas.

Section 4.23.020      Municipal Gas Use Tax Imposed.

   A.   Tax imposed. Except as otherwise provided by this chapter, a tax is imposed on the privilege of using or consuming gas in the Village that is purchased in a sale at retail at the rate of five cents ($0.05) per therm.

   B.   Applicability of Municipal Gas Use Tax. The ultimate incidence of and liability for payment of the tax is on the retail purchaser, and nothing in this chapter shall be construed to impose a tax on the occupation of distributing, supplying, furnishing, selling or transporting gas.

   C.   Payment of Municipal Gas Use Tax.

      1.   The retail purchaser shall pay the tax, measured by therms of gas delivered to the retail purchaser’s premises, to the public utility designated to collect the tax pursuant to Section 4.23.040 of this chapter on or before the payment due date of the public utility’s bill first reflecting the tax, or directly to the Village on or before the fifteenth day of the second month following the month in which the gas is delivered to the retail purchaser if no public utility has been designated to collect the tax pursuant to Section 4.23.040 or if the gas is delivered by a person other than a public utility so designated.

      2.   A person who purchases gas for resale and therefore does not pay the tax imposed by this chapter with respect to the use or consumption of the gas, but who later uses or consumes part or all of the gas, shall pay the tax directly to the Village Treasurer on or before the fifteenth day of the second month following the month in which the gas is used or consumed.

   D.   Limitation of Municipal Gas Use Tax.

      1.   Nothing in this Chapter shall be construed to impose a tax upon any person, business or activity which, under the constitutions of the United States or State of Illinois, may not be made the subject of taxation by the Village.

      2.   To prevent multiple taxation, the use of gas in the Village by a retail purchaser shall be exempt from the tax imposed by this chapter if the gross receipts from the sale at retail of such gas to the retail purchaser are properly subject to a tax imposed upon the seller of such gas pursuant to the Village’s Gas Distribution Occupation Tax, as provided in Chapter 4.22 of this Code.

Section 4.23.030      Effective Date of Tax.

The use tax shall apply to gas for which the delivery to the retail purchaser is billed by a public utility on or after June 1, 2014.

Section 4.23.040      Collection of Tax by Public Utility.

   A.   Contract with Public Utility. The Village Manager or his or her designee is authorized to enter into a contract for collection of the tax imposed by this chapter with any public utility providing gas service in the Village (“collection agreement”).

   B.   Content of collection agreement. The collection agreement shall include and substantially conform with the following provisions:

      1.   the public utility will collect the tax from retail purchasers as an independent contractor;

      2.   the public utility will remit collected taxes to the Village no more often than once each month;

      3.   the public utility will be entitled to withhold from tax collections a service fee equal to three per cent (3%) of the amounts collected and timely remitted to the Village;

      4.   the public utility shall not be responsible to the Village for any tax not actually collected from a retail purchaser; and

      5.   such additional terms as the parties may agree upon.

Section 4.23.050      Taxpayer’s Books and Records.

   A.   Every taxpayer shall keep accurate books and records, including original source documents and books of entry, denoting the activities or transactions that gave rise, or may have given rise to any tax liability or exemption under this chapter. All such books and records shall, at all times during business hours, be subject to and available for inspection by the Village.

   B.   Any public utility that collects the tax imposed pursuant to Section 4.23.040 of this chapter shall maintain books and records as provided in the collection agreement required pursuant to said Section 4.23.040.

Section 4.23.060      Effect of Local Taxpayers’ Rights and Responsibilities Ordinance.

   A.   The tax imposed by this chapter is a locally imposed and administered tax as defined in the Local Taxpayers’ Rights and Responsibilities Ordinance, Chapter 4.44 of this Code, which provides for the collection, enforcement and administration of locally imposed and administered taxes and establishes uniform rights and responsibilities of the taxpayers subject to those taxes. To the extent that the provisions of this chapter conflict with Chapter 4.44, the provisions of this chapter shall prevail.

   B.   For purposes of the tax imposed pursuant to this chapter:

      (1)   A public utility collecting the tax pursuant to Section 4.23.040 of this chapter shall not be a “tax collector” within the meaning of the Local Taxpayers’ Rights and Responsibilities Ordinance; and

      (2)   A taxpayer who pays the tax to a public utility designated to collect the tax pursuant to Section 4.23.040 of this chapter shall be deemed to have paid the tax directly to the Village by the date due.

   C.   For purposes of the penalty imposed for late payment of tax by Section 4.44.050 of the Local Taxpayers’ Rights and Responsibilities Ordinance, a taxpayer who pays the tax directly to the Village, rather than to the public utility which billed the taxpayer for the tax pursuant to Section 4.23.040 of this chapter, shall be deemed to have paid the tax late.

   D.   The Finance Department shall be responsible for billing and collecting any penalty or interest imposed under the Local Taxpayers’ Rights and Responsibilities Ordinance.

SECTION 3:   All ordinances or parts of ordinances thereof in conflict with this Ordinance are hereby repealed to the extent of any such conflict.

SECTION 4:   Any Section or provision of this Ordinance that is construed to be invalid or void shall not affect the remaining Sections or provisions which shall remain in full force and effect thereafter.

SECTION 5:   This Ordinance is passed by the Council of the Village of Winnetka in the exercise of its home rule powers pursuant to Section 6 of Article VII of the Illinois Constitution of 1970.

SECTION 6:   This Ordinance shall take effect immediately upon its passage, approval and posting as provided by law.

PASSED this 4th day of March, 2014, pursuant to the following roll call vote: 

AYES:    Trustees Adams, Corrigan, Kates and McCrary

NAYS:    None.

ABSENT:    Trustees Braun and Buck

APPROVED this 4th day of March, 2014.

   Signed:

   s/E. Gene Greable

   Village President

Countersigned:

s/Robert M. Bahan

Village Clerk

Published by authority of the President and Board of Trustees of the Village of Winnetka, Illinois, this 4th day of March, 2014.

Introduced: February 4, 2014

Passed and Approved: March 4, 2014