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Tourism Tax Explained
In the City of St. Charles, there are two taxes used to fund the Convention and Visitors Bureau. The primary tax is called the License Tax - Tourism, but we refer to it as the Tourism Tax. The second tax is the Convention Center tax and it is earmarked specifically for operating and maintaing the convention center building and property. The Tourism Tax was originally voted on by the citizens of St. Charles City in 1984 and has been in effect ever since. Both of these taxes are defined in the City Ordinances under Chapter 620.
The Tourism Tax is defined as:
- A. Amount Of Tax. Every person engaged in the business of renting, leasing or letting living quarters, sleeping accommodations, rooms or a part thereof, in connection with any hotel, motel or tourist court, shall pay to the City a license tax equal to one percent (1%) of the gross rental receipts derived from or paid by transient guests for sleeping accommodations. Every person engaged in the business of a restaurant and selling prepared food or meals shall pay to the City a license tax of one percent (1%) of the gross receipts from sales of all goods and services transacted at retail upon the premises, excluding the sale of gasoline from those gross receipts. This license tax shall be in addition to all other license taxes which are applicable to hotels, motels, tourist courts and restaurants.
- B. Use Of Funds. All funds collected pursuant to the provisions of this Section shall be used exclusively to promote tourism, conventions and other related activities in the City. The funds shall be administered by the Director of Finance in consultation with the Director of the Convention and Visitors Bureau.
Essentially, hotels and facilities that serve prepared food (restaurants, convience stores, etc.) pay 1% taxes on gross receipts on top of any other applicable tax. Below is a table outlining the amount of taxes and penalties collected over the past few years. Some numbers have been rounded for easier viewing.
| Income Source | 2019 | 2020 | 2021 | 2022 | 2023 | Estimated 2024 |
|---|---|---|---|---|---|---|
| Licenses Tourism Tax | 3,237,098 | 2,406,112 | 3,319,503 | 3,727,905 | 4,024,592 | 4,225,822 |
| Licenses Hotel Tax | 397,726 | 214,978 | 332,201 | 437,501 | 497,946 | 507,906 |
| Licenses Penalties | 17,235 | 11,443 | 11,864 | 17,006 | 31,669 | |
| Annual Total | $ 3,652,059 | $ 2,632,533 | $ 3,663,568 | $ 4,182,411 | $ 4,554,207 | $ 4,753,728 |
The end result of this is the Director of the Convention and Visitor’s Bureau is the only one authorized to utilize these funds. The proposed organizational changes would install someone who, we believe, would utilize these funds outside the original intent of this tax. And provided it is under the guise of “promote tourism, conventions and other related activities in the City”, it would be legal to do so while at the detriment of all the work the CVB currently performs and excels at.