What Can a Municipality Do About the Proliferation of Non-Tax Generating Banks in Prime Retail Areas?
For economic reasons, banks like to establish branches in prime commercial areas of municipalities. Of course, banks do not generate sales tax, so a large number of branch banks in prime retail areas are not always a benefit to the community. Some municipalities have used zoning laws to impose a moratorium on establishment of new banks in certain areas. But this is only a temporary solution. The real answer is to find a way to make banks generate revenue for the municipality. The Illinois Municipal Code, 65 ILCS 5/11-42-1, authorizes all municipalities to license, tax and regulate bankers-not banks, but bankers. Regulation of banks is a matter of state or federal law, and municipalities cannot get involved in that area. There are undoubtedly limits on how far a municipality could go in regulating bankers, as well. But a tax does not necessarily have to involve regulation. So a municipal tax on bankers, without licensing or other regulations, and not unreasonable in amount, would seem t
