Small Businesses Can Apply for Financial Assistance through New Sales Tax Rebate Program
WILMETTE, IL. (March 26, 2020) -
The Wilmette Village Board unanimously approved a $375,000 economic relief package to support small businesses in the Village which have been negatively impacted by the current public health crisis. The grant program will provide immediate financial support to restaurants, retail stores and other local merchants through a municipal sales tax rebate program.
Wilmette Village President Bob Bielinski stated, "We recognize that COVID-19 has placed a substantial burden on the Village's small business community. This program will provide funds for businesses that need help now making payroll or paying suppliers." He added, "As a local government, Wilmette has the ability to move faster than the federal and state governments which are implementing more substantial financial assistance programs for small businesses. The intent of this program is to put money into the hands of businesses immediately so they can continue to remain in business until they are able to access those larger programs."
Businesses collect sales tax on all retail purchases, which they then remit to the State of Illinois. The State keeps a portion of the sales tax collected and disperses the rest to other units of government. All municipalities receive the "municipal sales tax," which is equal to 1% of retail sales that took place inside the municipality. In addition, some communities have enacted a "home rule sales tax," which in Wilmette is equal to another 1% of certain retail sales generated in the Village. In 2019, the Village received $2.63 million of "municipal sales tax" and $1.75 million of "home rule sales tax" for a total of $4.38 million of sales tax.
Under this program, the Village will rebate $375,000 of its "municipal sales tax" back to the eligible small businesses that collected the tax. Eligible businesses can receive 50% of the amount of "municipal sales tax" they collected in 2019. The rebate is a grant, not a loan, and businesses will not be required to repay the money they receive under the program.
President Bielinski further stated, "Because our local businesses are a critical part of the vitality of the Village and because the sales tax they generate is an important funding source for municipal services and infrastructure, supporting local businesses is good public policy." He added, "While we are hopeful that this program will give businesses some short-term economic relief, it is absolutely vital that Wilmette residents continue to support our local restaurants and retailers by responsibly shopping at local businesses which remain open because the State has deemed them essential, ordering takeout and delivery from restaurants, and making online purchases. We can all work together to help our business community during this very challenging time."
Small businesses, which were operating in the Village as of March 17, 2020 and suffered a decline in sales of at least 15% due to the COVID-19 pandemic, may be eligible for the program. Because the program targets small businesses, businesses that generated more than $7.5 million in annual sales in 2019 are not eligible for the program. Also, businesses must have collected at least $500 in "municipal sales tax" (which would have resulted from $50,000 in annual sales) in 2019 to be eligible. Businesses that opened in 2020 or were open for only a portion of 2019 will be asked to provide additional information to determine eligibility and the amount of the rebate. Businesses that are part of a franchise system or part of a chain with more than four units are not eligible. Additionally, private clubs and home occupations are also not eligible. The rebate can be used for payroll, paying suppliers and other operating expenses, but cannot be used for capital improvements or rent.