The consultation will take place between September and December this year, and will seek opinion on whether the levy should apply to venues that are authorised to sell alcohol between midnight and 6am.
Reductions of 30% to the levy will be considered for venues who receive small business rate relief and have a rateable value of less than £12,000 as well as venues that are members of a suitable best practice scheme.
There are no proposed exemptions for venues that are only permitted to trade between midnight and 6am on New Year’s Eve.
If a levy is implemented after the consultation, it is proposed to come into effect in June 2017.
Possible exemptions for the levy would be premises participating in a business improvement district (BID).
A BID is an area where all businesses must pay a charge rather than just late-night businesses only paying the late-night levy.
Last month, Cheltenham Borough Council scrapped its late-night levy and took a step towards becoming a BID.
Green Party councillors called for alcohol taxation to replace the late-night levy where a proportion of the taxation would go towards policing the night-time economy in January this year.
In April, a report from the British Beer and Pub Association (BBPA) and the Campaign for Real Ale (CAMRA) urged councils not to impose the late-night levy but to focus on community partnerships instead.
Nottingham City Council imposed a late-night levy in November 2014 to help fund the cost of policing the night-time economy but raised £150,000 less than was expected.