Elmhurst Sales Tax Rebate Violation

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

City Lawsuit Against Lucky Motors

The City of Elmhurst is suing Lucky Motors, claiming the car dealership violated their shared sales tax rebate agreement.

  • Date of lawsuit filing: February 11
  • Amount sought by the city: $144,635 in tax rebates

Rebate Agreement Details

The agreement, originally made in 2010, included the following terms:

  • Elmhurst returned 50% of the annual sales tax generated by Lucky Motors back to the dealership.
  • The rebate was capped at $50,000 per year.
  • The total rebate was limited to $500,000 over 10 years.

Relocation Clause

The agreement included a specific condition:

  • If Lucky Motors relocated operations outside Elmhurst during the term, they would have to repay all or part of the rebates.
  • If relocation occurred within the first five years, 100% repayment was required.

Alleged Relocation to Villa Park

In September, Lucky Motors allegedly moved its operations to a different location in Villa Park.

According to Chris Wright, one of the owners:

  • Business was slow, and consolidating to one site made sense.
  • There was an expected sale of the Elmhurst building, but it did not happen.
  • Lucky Motors still owns the Elmhurst property.

City’s Legal Response

  • In October, Elmhurst’s city attorney sent a letter requesting repayment of the $144,635 or else face legal action.
  • In response, Lucky Motors moved operations back to Elmhurst, Wright said.

“As far as we’re concerned, we have rectified it,”Chris Wright

City’s Position on Repayment

City Manager James Grabowski disagrees that returning operations fixes the issue:

“The only way to rectify the alleged agreement violation is for Lucky Motors to repay the city the sales tax it had been rebated.”

  • The city remains open to a settlement discussion.
  • If unresolved, the matter will be settled by the courts.

“They owe us a lot of money. It will certainly be less than what they owe us.”James Grabowski

Wright acknowledged that the amount is significant.