Elmhurst Sales Tax Rebate Violation

By June 16, 2016November 16th, 2019Illinois Sales Tax, Uncategorized

Elmhurst Sales Tax Rebate Violation

Note: The home rule sales tax rate increased to 1.00% for Elmhurst sales tax

The city of Elmhurst is suing Lucky Motors on claims the car dealership violated the sales tax rebate agreement the two share.

The lawsuit filed Feb. 11 seeks $144,635 in tax rebates the city says it should be repaid.

Based on the terms of the 2010 agreement, the city had given 50 percent of the sales tax generated each year by Lucky Motors back to the dealership. The 10-year rebate deal was capped at $50,000 per year or a total payout of $500,000.

The deal with Lucky Motors included a provision that requires the dealership to return all or part of the rebate payments if it relocates its operations outside the city during the term of the agreement. If the company relocates within five years, it would have to pay back all the rebates.

In September, Lucky Motors had allegedly relocated its business to its other site in Villa Park.

Chris Wright, one of the owners of Lucky Motors, said the dealership had several reasons to move operations to its Villa Park location. Business was slow, so it made sense to consolidate staff to one site, he said. Wright also expected to close on the sale of the Elmhurst building to another owner who had expressed interest.

However, the sale didn’t happen, and Lucky Motors still owns the building in Elmhurst.

Elmhurst’s city attorney in October, sent a letter requesting the business repay the full $144,635 in rebates or face further action.

The dealership moved operations back to the Elmhurst site after being contacted by the city, Wright said.

“As far as we’re concerned, we have rectified it,” he said.

However, City Manager James Grabowski said the only way to rectify the alleged agreement violation is for Lucky Motors to repay the city the sales tax it had been rebated.

“We have a standing offer with the owners of Lucky Motors to sit down and settle this, if they choose to,” Grabowski said.

If not, it will be up to the courts to decide, and Grabowski said he’s unsure how long that will takeor how much it will cost the city.

“They owe us a lot of money,” he said. “It will certainly be less than what they owe us.”

Wright agreed the amount the city is seeking is a lot, saying it would have a big impact on his business to pay it.

Elmhurst Sales Tax Rebate Violation

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