Food delivery services by third parties held responsible for the collection of municipal catering tax

Third-party food delivery services that thrived during the pandemic would be required to collect and remit the percentage of Chicago restaurant tax, as part of a mayor’s plan put forward on Monday to clear “confusion” from the collection of taxes.

The city council finance committee transferred responsibility for collecting restaurant taxes to third-party delivery companies such as GrubHub and Uber Eats, DoorDash and Postmates, paving the way for final approval at the city council meeting. Wednesday.

Mayor Lori Lightfoot’s pandemic relief program also includes: extending the 15% cap on restaurant delivery charges up to 180 days after all pandemic restrictions on restaurants are lifted ; allowing both the delivery and making of take-out cocktails and saving up to three weeks from the time it takes for new restaurants to obtain opening licenses in spaces occupied by previously closed establishments.

City comptroller Reshma Soni said the decision to hold delivery companies accountable for collecting and remitting the city’s 0.5% restaurant tax that generated $ 39 million in annual revenue before the pandemic will eliminate the “confusion” caused by a recent change in the state’s process for collecting state sales taxes on restaurant meals.

“Some of the delivery companies kept the city’s share of the tax, but they didn’t remit those taxes to us. Some did not keep the city’s share. In fact, they gave it to the restaurant. But they didn’t make it clear to the restaurant that the city’s share of taxes went to the restaurant. So the restaurant didn’t know whether to pay or not. And then some did not collect at all, ”Soni told the aldermen.

“There were so many different things being done and there were no guidelines set by us similar to what the state had done. This will help delivery companies know they need to go through the same process as the Crown. “

Ald. Ray Lopez (15th) was also concerned that Chicago taxpayers are being cheated by third-party parking apps like SpotHero, which may or may not collect and remit the city’s parking tax.

“I don’t think this is unique to the restaurant or takeout industry. We see the same situation happening with parking and third-party apps. They’re supposed to charge taxes – get paid taxes for parking and the question of installments remains unanswered, ”Lopez said.

“Hopefully, as the committee approves this today and votes on Wednesday, you and the budget team take a look at all the third-party apps that are dominating this economy now that we are getting out of COVID. … We need to make sure that as they thrive, they also pay the taxes that consumers pay and make sure that the money makes its way into the various coffers that they belong to.

Soni agreed that there were “others that we should consider as well.” … I’m glad you mentioned parking in particular.

In other actions:

• The committee agreed to improvements in eight parks, funded by $ 14.8 million in funds to fund tax increases. The largest – for $ 8.9 million – is in Garfield Park and includes renovations to a clubhouse, baseball field and stable.

• The aldermen also agreed to pay $ 1.825 million to compensate five female paramedics who accused their Chicago Fire Department bosses of sexual harassment.

Some aldermen have wondered why taxpayers were held responsible for the bad behavior of some “madmen and stalkers”.

Finance committee chairman Scott Waguespack (32nd) and the company’s senior deputy legal counsel Renai Rodney told them that was what the law required.

“This is why it is so important that city council insist that departments have the proper training and discipline to engage in things they should not do – like sexual harassment, like workplace injuries, like police shootings, ”Ald said. Michèle Smith (43rd).

“By providing the right training and forcing employees to meet this standard of conduct, the city does not find itself stuck holding the bag for the wrong.” [behavior] individuals.

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