A restaurant, bar and alcohol tax passed in a first-round vote April 16 has business owners and city officials caught on both sides of the tax fence.

The DeKalb City Council probably will take its final vote on the 1.75 percent increase on restaurant meals and alcohol sales at the end of May. If passed, the new tax on a restaurant meal would be 2 percent.

The new tax is to take the place of the food and drug tax that Illinois no longer will allow after July 1.

DeKalb derives “a substantial amount of its income” from this tax, said 6th Ward Alderman Jamie Pennington. The loss of the tax “will hurt the city,” he said.

Because the city is creating more services, finishing projects and needing more staff, and because the current 1 percent food and drug tax will stop providing DeKalb with revenue, the new tax “has to make up for lost tax,” Pennington said.

The new tax can alleviate some of the problems, he said.

The council opted for the luxury tax as an alternative to increased property taxes, Pennington said. The council also decided on the tax because it would be more fair than a food and drug tax, he said.

“The tax should be put on (restaurants and bars),” said 3rd Ward Alderman William Hanna. “It’s a luxury. The poorest people would be affected the least.”

Chris Carpenter, co-owner of Amnesia, 1000 W. Lincoln Hwy., The Liquor Store and Molly’s, both at 1022 W. Lincoln Hwy., feels the tax is unfair. “I’m opposed to the tax,” he said. “I just didn’t think that would be fair to impose a tax on what they call ‘luxury’ items.”

Carpenter questioned why restaurants and bars had been singled out as luxury items and not other businesses. “What about people who rent videos or buy a new car?”

The state mandates taxable areas, Pennington said, adding, “I have not heard of a video tax.” Taxable areas include gasoline, telephone service, tobacco sales, hotel and motel services and other areas, he said.

Carpenter said the new tax could hurt local businesses because prices might go up.

anna said the new tax will help even out taxes in the city and pay for city expenses. “Otherwise, I’m totally against taxes whatsoever,” he said.

Pennington said the council most likely will pass the tax in May. However, when the tax will take effect has not been decided, he said.

“I just hope they have researched every avenue before they implement any new tax,” Carpenter said.