Bonding on Sales Tax Deals is possible through Business District for Non-Home Rule Municipalities

Let’s say you have a great retail project.  The municipality is committed to helping make it happen and has pledged sales taxes on a pay-as-you-go basis. But it looks like you will need more cash upfront than you thought because you need to do roadway improvements.  The City can’t sell bonds based on the sales tax pledge because they are not home rule. Is there any way for the City to issue sales tax bonds so you can receive some upfront funds?

Yes, assuming the site meets the statutory requirements (a less stringent “blight” finding), the City could form a Business District, levy a Business District sales tax (not to exceed 1%) and, under that statute, have the authority to sell bonds for the roadway improvements. Remember, the Business District sales tax is a self-imposed tax and you may have some resistance from your retailers.

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