City of Pontiac, IL
07/02/2024 | Press release | Distributed by Public on 07/02/2024 16:08
City of Pontiac Adopts a 1% Municipal Sales Tax
On July 1, 2024 the Pontiac City Council passed ordinance 2024-O-019 which adopts a Non-Home Rule Municipal Retailer's Occupation Tax and a Non-Home Rule Municipal Occupation Service Tax. Together, both are commonly called the "sales tax". In addition, the council passed resolution 2024-R-005 which states the City's intent is to direct all revenue from the Non-Home Rule Municipal Sales Tax toward infrastructure as defined in Illinois Statute. The tax will begin being collected on January 1, 2025. The City has put together the following FAQs
What is the authority to implement the tax?
As an end result of the State of Illinois FY 2025 budget, the Illinois Legislature passed HB3144 which authorizes a non-home rule community to adopt a Retailer's Occupation Tax and a Service Occupation Tax (65 ILCS 5/8-11-1.1) by ordinance. It previously required passage by referendum.
What is included in the tax?
Retailer Occupation Tax
- General Merchandise Where Sale Originated
- Foods prepared for on premise consumption
- All candy and soft drinks
Service Occupation Tax
- Tangible personal property sold incident to sales and service.
What is excluded from the tax?
Groceries, drugs and titled vehicles are excluded.
How much is the sales tax?
1% tax means one penny on every dollar spent or one dollar of tax per $100.00 spent on eligible merchandise.
How much is the tax expected to generate?
Under the current trend, the City expects to generate approximately $2,000,000.00 per year
When does the tax begin?
January 1, 2025
What will the overall all sales tax rate be in Pontiac?
The tax rate is broken down as follows:
6.25% State Sales Tax
1.00% County School Sales Tax
1.00% Non-Home Rule Municipal Sales Tax
Total 8.25%*
- Vermillion Plaza also has a 1% Business District Redevelopment tax making its overall rate 9.25%
What are some tax rates around Pontiac?
Chatsworth 8.25%
Chenoa 7.75% and 7.25%
Dwight 8.25%
Fairbury 7.25%
Streator 8.25%
Bloomington 8.75%
Normal 8.75%
Who pays the sales tax?
Residents and non-residents alike will pay the sales tax whenever eligible retail merchandise is purchased.
What will the City use the revenue for?
Illinois law defines only 2 acceptable uses for the Non-Home Rule sales tax.
Expenditures may only be used for: Public Infrastructure, defined by statue as "municipal roads and streets, access roads, bridges, and sidewalks; waste disposal systems; and water and sewer line extensions, water distribution and purification facilities, storm water drainage and retention facilities, and sewage treatment facilities; or
Property Tax Relief, defined by statute as "the action of a municipality to reduce the levy for real estate taxes or avoid an increase in the levy for real estate taxes that would otherwise have been required."
Resolution 2024-R-005 outlined the City intends to use all funds toward public Infrastructure.
This includes but is not limited to: Streets, sidewalks, ADA, bikepaths, bridges, sewer lines and storm water lines. Work will come in various forms from grading, spray patching, concrete, hot mix asphalt, cold patching and other repair and rebuilding techniques.
When will my street be fixed/how are infrastructure needs prioritized?
Surface transportation, storm and sanitary sewer lines are being inventoried and rated. Each year the City Engineer, the Street Superintendent and Wastewater Treatment Plant Superintendent build a priority list and present it to the City Council Infrastructure Committee. A recommendation is then passed along to the City Council and approved as part of the annual budget. A more comprehensive 5-year plan is currently in development.
Below is a GIS map of streets that have been rated.
Red- In need of repair or rebuild.
Orange and Yellow- In need of maintenance
Green- New or like new.