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Finance Committee Votes To Close Tax Collection Loophole For Online Sales Of Bottled Water And Alcohol

CHICAGO (CBS) -- City Hall will soon close a loophole allowing shoppers to avoid taxes on bottled water and alcohol by placing delivery orders online.

The City Council Finance Committee on Thursday approved an ordinance that would make it clear wholesalers must collect all applicable city taxes from the sales of bottled water and alcohol.

If any retailer receives shipments of bottled water or booze that hasn't been taxed by the wholesaler, they must collect the tax themselves.

Ald. Chris Taliaferro (29th) questioned the timing of the move, coming at a time when many people are stocking up on bottled water due to fears of possible quarantines over the spread of the novel coronavirus.

"Folks are now buying a lot of water and a lot of supplies because of what this country and other countries are experiencing with COVID-19. Are you concerned about the optics of the city raising taxes or charging additional taxes during this time period?" Taliaferro asked City Comptroller Reshma Soni. "I think the optics of things looks bad when we're increasing taxes on bottled water that's being shipped in, especially in light of the COVID-19 virus."

However, Soni stressed that the city isn't raising any taxes, just making sure that the city's five-cent per bottle water tax is collected when buyers shop online.

Soni said some online retailers already collect all applicable city taxes, but some do not. She said that often leads to people buying bottled water online from out-of-state, rather than shopping at local businesses to save money.

"This clarification is to make sure that, across the board, we are collecting the taxes, so it's fair to the residents, or fair to the businesses that are within Chicago," Soni said.

In other business, the Finance Committee also approved a crackdown on drivers who block bike lanes or bus lanes. Aldermen signed off on an ordinance that would allow police officers or parking enforcement aides to take a picture of a car's license plate if it is illegally parked in a bike or bus lane, and send the car's owner a ticket by mail if they drive away before a city employee can finish writing up a citation.

Tickets would have to be mailed out within 30 days of the Illinois Secretary of State notifying the city who owns or leases the vehicle. Tickets could be sent out to the vehicle's owner no later than 90 days after the actual violation, or to the lessee no later than 210 days after the violation.

Both measures must still be approved by the full City Council.


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