What are the sources of Village revenue?
The Village of Riverwoods collected $4,301,018 (plus $68,696 in towing fees, reimbursed by owners) on a modified cash basis1 in 2008 to provide a variety of services for Village residents ranging from zoning, building inspections, water and sewer services to 24x7 police protection from the Village Police Department. The Village imposes taxes that accounted for $937,808 and collected user fees that accounted for an additional $1,902,507. The remainder of the $1,460,613 in funding used to provide residents with services were allocated from the State of Illinois based on the population of the Village relative to the rest of the state.
|Sources of Village Revenue||Village Tax||State Tax Allocation to Village||Interest, Usage Fees & Services||Total||Fund to Which Revenue is Allocated|
|Telecommunication Tax||$434,020||$434,020||General Fund|
|State Income Tax||$372,523||$372,523||General Fund|
|Utility Tax - Electric||$297,764||$297,764||General Fund|
|Municipal Sales Tax||$220,090||$220,090||General Fund|
|Utility Tax - Gas||$194,406||$194,406||General Fund|
|Construction Fees (Building Permits)||$139,996||$139,996||General Fund|
|Hotel Tax||$113,881||$113,881||General Fund|
|Home Rule Tax (Sales Tax 1/2%)||$100,226||$100,226||General Fund|
|Cable Franchise Fee||$57,474||$57,474||General Fund|
|Local Use (Sales) Tax||$57,366||$57,366||General Fund|
|Liquour License Fees||$20,000||$20,000||General Fund|
|Personal Property Replacement Tax||$2,276||$2,276||Other|
|Special Inspection Fees||$870||$870||Other|
|Cell Tower Leases||$88,300||$88,300||Police Fund|
|Interest from Bank Accounts||$361,368||$361,368||Other|
|Property Tax||$411,196||$411,196||Police Fund|
|Impact Fees||$53,100||$53,100||Police Fund|
|Patrol Violations||$8,241||$8,241||Police Fund|
|Circuit Court Fines||$158,968||$158,968||Police Fund|
|Burglar Alarm Registrations & False Alarms||$710||$710||Other|
|Administrative Tows||$68,696||$68,696||Police Fund|
|Property Tax - Road & Bridge Fund||$34,719||$34,719||Other|
|Motor Fuel Tax||$102,150||$102,150||Other|
|Sale of Water||$913,994||$913,994||Water Fund|
|Water Tap on Fees||$62,285||$62,285||Water Fund|
|Sewer Tap on Fees||$53,078||$53,078||Other|
|Lincolnshire Sewer Transmission Fee||$7,784||$7,784||Other|
|Grinder Pump Maint. Fees||$34,232||$34,232||Other|
Table 1: Sources of Village 2008 Revenue - Un-audited
The Village applies a modified cash basis system accounting for expenses on a cash basis and assets on an accrual basis.
In summary form, property taxes accounted for 9% of total Village revenue while interest on deposits, usage and service fees provided 46%. An additional 12% of Village revenue was raised through non-property taxes such as sales taxes and a tax on hotel rooms located in the Village. The Village was reliant on its pro rata share of state taxes allocated to the Village for the residual 33% of revenue in 2008.
The table below breaks down revenue in accordance to the department ("fund" in municipal accounting terminology) with which it is associated:
Sewer & Road Maintainance, Reserves
Major Revenue Sources - General Fund
- Telecommunications Tax
- State Income Tax
- Utility Tax - Electric
- Municipal Sales Tax
- Utility Tax - Gas
- Construction Fees (Building Permits)
- Hotel Tax
- Home Rule Tax(Sales Tax 1/2%)
- Cable Franchise Fee
- Local Sales Tax
- Liquor License Fees
- Police Fund
- Property Tax
- Patrol Violations
- Impact Fees
- Circuit Court Fines
- Cell Tower Leases
- Administrative Tows
- Water Fund
- Water Sales
- Tap On Fees
- Other Funds
- Personal Property Replacement Tax
- Special Inspection Fees
- Interest from Bank Accounts
- Burglar Alarm Registration & False Alarm Fines
- Motor Fuel Tax
- Lincolnshire Sewer Transmission Fee
- Grinder Pump Main. Fees
This state tax is imposed on intrastate messages (i.e., those that originate or terminate in Illinois and are billed to a service address in Illinois) as well as interstate messages. The types of telecommunications which are taxable include messages or information transmitted through use of local, toll, or wide area telephone services; private line services; channel services; computer exchange services; cellular mobile telecommunication services; specialized mobile radio; stationary two-way radio; paging services; Digital Subscriber Line1 (DSL) services; Voice Over Internet Protocol (VOIP) services; and any other form of mobile and portable one-way or two-way communications; and any other transmission of messages or information by electronic or similar means.
The rate, which can be imposed in quarter-percent increments, cannot exceed 6%. The Illinois Department of Revenue collects the municipal tax for all municipalities that have an ordinance in effect other than the city of Chicago. Of the total 13% tax, Riverwoods imposes the statutory maximum 6% and the State of Illinois imposes a 7% excise tax.
State Income Tax Allocation to Riverwoods
The Illinois income tax rate is 3% for individuals, trusts, and estates and 4.8% for corporations. One-tenth of the net collections (gross collections minus refunds) is distributed to municipal and county governments in proportion to their population as compared to the total state population estimated at 12,943,351 by the Illinois Department of Revenue for December 20082. The population of Riverwoods is estimated at 3,905 or 0.030% of the state population.
Utility Tax - Electric
Illinois municipalities may impose a tax on the business of distributing, supplying, furnishing, selling, transmitting, or delivering electricity for use or consumption (and not for resale) within the corporate limits of the municipality. The Village of Riverwoods imposes a tax upon the privilege of using or consuming electricity acquired in a purchase at retail and used or consumed within the corporate limits of the Village at the following rates, calculated on a monthly basis for each purchaser:
Note: Digital Subscriber Line (DSL) services purchased, used, or sold by a provider of internet access, to provide internet access are subject to Illinois Telecommunication Taxes. DSL services purchased, used, or sold by a non-provider of internet access are also subject to Illinois Telecommunication Tax.
Current State of Illinois population estimates and per capita allocation of state income taxes, http://www.revenue.state.il.us/LocalGovernment/income&use.htm
- For the first 2,000 kilowatt-hours used or consumed in a month; 0.517 cents per kilowatt-hour;
- For the next 48,000 kilowatt-hours used or consumed in a month; 0.379 cents per kilowatt-hour;
- For the next 50,000 kilowatt-hours used or consumed in a month; 0.376 cents per kilowatt-hour;
- For the next 400,000 kilowatt-hours used or consumed in a month; 0.375 cents per kilowatt-hour;
- For the next 500,000 kilowatt-hours used or consumed in a month; 0.323 cents per kilowatt-hour;
- For the next 2,000,000 kilowatt-hours used or consumed in a month; 0.320 cents per kilowatt-hour;
- For the next 2,000,000 kilowatt-hours used or consumed in a month; 0.315 cents per kilowatt-hour;
- For the next 5,000,000 kilowatt-hours used or consumed in a month; 0.310 cents per kilowatt-hour;
- For the next 10,000,000 kilowatt-hours used or consumed in a month; 0.305 cents per kilowatt-hour;
- For all electricity used or consumed in excess of 20,000,000 kilowatt-hours in a month; 0.300 cents per kilowatt-hour.
Municipal Sales Tax & Home Rule Tax (Sales Tax 1/2%)
"Sales tax" is imposed on a seller's receipts from sales of tangible personal property for use or consumption. Tangible personal property does not include real estate, stocks, bonds, or other "paper" assets representing an interest.
If the seller (typically an out-of-state business, such as a catalog company or a retailer making sales on the Internet) does not charge Illinois Sales Tax, the purchaser must pay the tax directly to the Illinois Department of Revenue.
The term "sales tax" actually refers to several tax acts. Sales tax is a combination of "occupation" taxes that are imposed on sellers' receipts and "use" taxes that are imposed on amounts paid by purchasers. Sellers owe the occupation tax to the department; they reimburse themselves for this liability by collecting use tax from the buyers. "Sales tax" is the combination of all state, local, mass transit, water commission, home rule occupation and use, non-home rule occupation and use, park district, and county public safety taxes.
For purposes of simplicity, Illinois Sales Tax has three rate structures - one for qualifying food, drugs, and medical appliances; one for items required to be titled or registered (vehicles); and another for all other general merchandise.
"Qualifying food" applies to food not prepared by the retailer for immediate consumption, such as grocery store food items. "Qualifying food, drugs, and medical appliancesâ" include:
- food that has not been prepared for immediate consumption, such as most food sold at grocery stores, excluding hot foods, alcoholic beverages, and soft drinks;
- prescription medicines and nonprescription items claimed to have medicinal value, such as aspirin, cough medicine, and medicated hand lotion, and
- prescription and nonprescription medical appliances that directly replace a malfunctioning part of the human body, such as corrective eyewear, contact lenses, prostheses, insulin syringes, and dentures.
- motor vehicles, ATVs, watercraft, aircraft, trailers, and mobile homes; and
- motor vehicles, aircraft, and vessels owned by a business when that business moves into or relocates to Illinois.
Other general merchandise
"Other general merchandise" includes sales of most tangible personal property including sales of:
- soft drinks;
- prepared food such as food purchased at a restaurant;
- photo processing (getting pictures developed);
- prewritten and "canned" computer software;
- prepaid telephone calling cards and other prepaid telephone calling arrangements;
- repair parts and other items transferred or sold in conjunction with providing a service under certain circumstances based on the actual selling price.
- Qualifying food, drugs, and medical appliances is 1%.
- Items required to be titled or registered is 6.25%.
- Other general merchandise is 6.25%.
- Motor fuel "prepaid sales tax" on Gasohol is $0.05 per gallon.
- Motor fuel "prepaid sales tax" on all other motor fuels is $0.06 per gallon.
- The Village of Riverwoods imposes a 0.50% sales tax on all general merchandise sold in the Village.
Utility Tax - Gas
The Gas Use Tax is imposed on the purchase of natural gas from outside of Illinois for use or consumption in Illinois. The delivering supplier collects, reports, and pays the Gas Use Tax to the Illinois Department of Revenue. Although municipalities may impose a tax on persons engaged in the business of distributing, supplying, furnishing, or selling natural gas for use or consumption (and not for resale) within the corporate limits of the municipality, the Village of Riverwoods does not impose a tax at this time. The rate cannot exceed 5% of gross receipts.
The Village is allocated its share of the state Gas Use Tax based on the Village population as compared to the total state population which is estimated at 12,852,548 in the 2007 US Census. The population of Riverwoods is estimated at 3,905 or 0.030% of the state population.
Construction Fees (Building Permits)
The Village Building Department issues permits for new homes, remodeling, additions, sheds, fences, decks, patios, sunrooms, roofing, siding, new windows, driveways, sidewalks, sewer and water (new or repairs) just to name a few of the areas we monitor for the health and safety of the village residents.
If you are in doubt regarding the need for a permit, please call and ask, we'll be more than glad to help. You will also need a permit to remove any trees from your property, as well as grading or filling-in of your property.
The fees collected are used to partially offset the cost to the Village of maintaining a Village Building Department including specialist services such as engineering and forestry.
The tax is imposed on the occupation of renting, leasing, or letting rooms to persons for living quarters for periods of less than 30 days. From the Riverwoods hotel tax ordinance, the tax applies to:
The word "hotel" and the word "motel" within the meaning of this Section includes every building or structure, kept, used, maintained, advertised and held out to the public to be a place where lodging or lodging and food or apartments or suites or other accommodations are offered for a consideration to guests, in which ten (10) or more rooms, apartments or suites or other accommodations are used for the lodging and lodging and food for such guests. (Ord. 99-9-24, 9-21-1999)
Units of local government may impose taxes or fees, which the State of Illinois Department of Revenue does not collect. The Village of Riverwoods imposes a 5% tax on hotel room receipts.
Cable Franchise Fee
In 1992, responding to widespread outrage at the high rates and poor quality of services offered by the cable industry, Congress enacted the Cable Consumer Protection and Competition Act to amend Title VI of the Communications Act of 1934 (the Cable Act).
The Federal Cable Act permits cities to charge franchise fees of up to 5% of a cable operator's gross revenues from "cable service." The Village of Riverwoods imposes a franchise fee of 5% on cable operators (Comcast and AT&T) gross revenues in the Village.
Liquor License Fees
The Village requires a liquor license for any entity which requires a state liquor license. The State of Illinois issues a state Liquor License which allows the licensee to sell and offer for sale at retail, only at the premises specified in such license, alcoholic liquor for use or consumption, but not for resale in any form. The Village has several classes of liquor license per Section 3-2-5 of the Village Ordinances based on the type of establishment, hours of operation, etc.