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* The Illinois Municipal League…
The Illinois Municipal League (IML) announced [Monday] that 656 municipalities across Illinois – more than half of all municipalities in the state – have adopted an ordinance establishing a 1% local grocery sales tax to replace the statewide grocery tax when it expires on January 1, 2026.
The statewide 1% grocery sales tax, a critical revenue source for essential local government services, was repealed as part of the State Fiscal Year 2025 budget. Without this funding, many communities would face significant budget shortfalls affecting essential services such as public safety, public utilities and infrastructure maintenance and repair.
To address these challenges, IML successfully advocated for legislation granting both home rule and non-home rule municipalities local authority to implement a 1% local grocery sales tax by ordinance.
“Sales tax revenues – for general merchandise or groceries, alike – are a cornerstone of many local budgets across Illinois, which is why 50.7% of municipalities took action to preserve this funding,” said IML Chief Executive Officer Brad Cole.
October 1, 2025, marked the deadline for municipalities to have passed an ordinance and file it with the Illinois Department of Revenue (IDOR) to ensure it takes effect January 1, 2026, preventing any loss of revenue when the statewide tax ends. IML maintains an up-to-date list (available via this link) of the Illinois municipalities that have adopted these ordinances.
Municipalities considering adoption of a local grocery sales tax can still do so going forward, by submitting a certified copy of an ordinance to IDOR, postmarked by April 1 for July 1 implementation or by October 1 for January 1 implementation. IML encourages communities to adopt the tax promptly, even if they do not currently have a local grocery store, to prevent further revenue losses. A model ordinance, along with additional information and resources, is available at iml.org/grocerytax.
[The law] also gives non-home rule municipalities the authority to impose sales taxes by up to 1% without a referendum. Many communities took advantage of that option, including six of the state’s largest cities: Elgin, Rockford, Aurora, Joliet, Naperville and Peoria.
Enacting a local tax saves some municipalities from suffering a large budget shortfall, such as the $4.5 million Aurora would’ve lost without the tax, according to IML data.
Other small communities will receive far less from the tax, such as $30,000 for Oregon in Ogle County. Revenue from the tax varies in each community based on factors such as how many grocery stores there are in the municipality.
Springfield and Chicago were the only municipalities with more than 100,000 residents that did not enact a tax. Chicago Mayor Brandon Johnson supported a city tax, but the City Council never approved the ordinance. Going forward without the tax will cost the city $60-80 million, according to the IML. Chicago faces a $1.2 billion budget deficit in 2026. […]
Some communities have increased other taxes instead. Mundelein, Gurnee and Bartlett have each raised their sales tax rate to replace the grocery tax revenue, the Daily Herald reported.
Thoughts?
posted by Isabel Miller
Wednesday, Oct 15, 25 @ 8:49 am
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Is there any data on how many communities did not implement either the grocery or non-home rule tax? Has to be very low.
Comment by DuPage Dad Wednesday, Oct 15, 25 @ 8:59 am
Even Leland Grove seems to be considering a “non-home rule Retailer’s Occupational Tax.” Most likely similar to the grocery tax.
My question is Why? Leland Grove has no businesses to speak of in their “donut hole” village. So what would be the point?
The retailer’s tax proposal has come up in recent Leland Grove board meetings, including one on July 22 for which these are their most recent minutes presently available:
https://www.lelandgrove.com/vertical/sites/%7B7B9F0F5C-E285-4429-AE01-5A52F12A8282%7D/uploads/July_22_2025_Minutes.pdf
Comment by Leatherneck Wednesday, Oct 15, 25 @ 9:02 am
IL is a trash state. Why would anyone live there?
Comment by Ben Wednesday, Oct 15, 25 @ 9:05 am
The Liquor Excise taxes and Liquor license fees have neither kept up with income growth nor inflation over the past 75 years. State government could be pulling in billions of dollars from the alcohol industry but we have privatized the profits and socialized the cost. Rather that $300 million and change the State could be pulling in more than that each month. The State has stepped back from funding to Municipal governments and higher education over the past twenty years. Both parties appear to be under the influence of the Casinos which are more than what they publicly advertise. Sober adults deserve discounts on insurance premiums.
Comment by Jack in Chatham Wednesday, Oct 15, 25 @ 9:13 am
The Gov dropped a financial bomb on munis and tried to play progressive hero without helping said munis with the shortfall.
It was pure politics and only a dunce would fall for it.
Comment by AlrightAlrightArlight Wednesday, Oct 15, 25 @ 9:15 am
That victory lap was a bit premature, eh, JB?
Comment by City Zen Wednesday, Oct 15, 25 @ 9:18 am
“Why would anyone live there?”
Wherever you go, there you are.
Comment by TheInvisibleMan Wednesday, Oct 15, 25 @ 9:48 am
“Wherever you go, there you are.”
And where you are has the highest tax burden in the nation and the worst pension debt. Enjoy.
Comment by Ben Wednesday, Oct 15, 25 @ 9:49 am
“has the highest tax burden in the nation and the worst pension debt. Enjoy.”
Thanks, I will enjoy.
We all make our choices in life.
Comment by TheInvisibleMan Wednesday, Oct 15, 25 @ 9:59 am
That’s Illinois doomers for you: Taxes have been cut for almost half of the state’s municipalities and they won’t say something positive. Almost as if they are just partisan hacks. When will they finally leave Illinois?
Comment by Grandson of Man Wednesday, Oct 15, 25 @ 10:00 am
Jack from Chatham…if there is a Golden Horseshoe for “Statehouse’s New Anita Bedell” you got it locked down this December.
Eating and Drinking Places contributed just over ONE BILLION dollars in sales taxes in 2024 in Chicago alone. Those sales taxes are capturing higher beer, wine, and spirits price increases far more efficiently than (also sky high) State, City, and County level “sin” taxes on alcohol.
You can rail against demon rum…and beer…and wine all you want but facts are Illinois and Chicago are already the highest such taxes in the whole Midwest and way higher than other big cities
Comment by ChicagoBars Wednesday, Oct 15, 25 @ 10:05 am
The best line I’ve heard at Chicago City Hall this year was “How the (expletive deleted) did the Mayor and his IGA team not just call the IML as soon as this got introduced and stall the grocery tax repeal for a year or three until after the election?” from a undisclosed Alderman.
Sadly not said into a hot mic though. Maybe he’ll say it during budget hearings next week.
Comment by ChicagoBars Wednesday, Oct 15, 25 @ 10:07 am
“My question is Why? Leland Grove has no businesses to speak of in their “donut hole” village. So what would be the point?”
Illini Country Club?
Comment by Bigtwich Wednesday, Oct 15, 25 @ 10:12 am
Liquor tax tidbit. Quite sometime ago the tax revenue on cannabis overcame the tax revenue on liquor. I was somewhat surprised by that revelation given the fact you can by liquor in so many places while the potshops are very few in comparison. perhaps some equilibration is in order?
Comment by flea Wednesday, Oct 15, 25 @ 10:15 am
===Thoughts===
There’s that scene in History of the World Part I where all of the Roman senators answer the question what about the poor in unison. The quote isn’t appropriate language for this blog, but that’s how I assume the conversation went down. The tax is regressive and it’s also got a real high cost of administration for the amount of effort involved for all parties. Y’all really need a nickle tax on a purchase of a gallon of milk? Couldn’t find another more efficient or more equitable way to make that work? Okay. Maybe let someone else run things?
===Why would anyone live there?===
All the people here are people. Several of our neighbors have decided that some folks aren’t people anymore and don’t or shouldn’t have rights.
Don’t care how much other states lie about their trains being on time. I’ll put up with a lot so that all of my neighbors are still people.
Comment by Candy Dogood Wednesday, Oct 15, 25 @ 10:15 am
–
The Liquor Excise taxes and Liquor license fees have neither kept up with income growth nor inflation
–
Hard liquor, over 20 percent, has a state excise tax of eight dollars and fifty-five cents per gallon.
That’s paid on the back end before the price is provided to the consumer. The price the customer pays then also has sales tax on that sale.
Personally I don’t drink much these days, but the current liquor excises taxes mean a cheap bottle of gin has almost half the retail price made up of excise taxes.
That seems fair.
The beer and wine tax could probably be raised though, for an easy revenue boost.
Comment by TheInvisibleMan Wednesday, Oct 15, 25 @ 10:17 am
I cannot for the life of me understand why Illinois does not look at a service tax(I know its because the powerful legal lobby as legal services would be taxed). Its ok to tax food but that Mani/Pedi is 100% tax free.
Comment by Proud Wednesday, Oct 15, 25 @ 10:18 am
I get that half the municipalities have implemented the tax, but what percentage of Illinois citizens reside in a municipality that has implemented the tax?
Comment by No. 90368-509 Wednesday, Oct 15, 25 @ 10:24 am
==I cannot for the life of me understand why Illinois does not look at a service tax==
They should but the dirty little secret is our sales tax rate is so high because of that exclusion. But they have expressed little interest in expanding the tax base to cover services while lowering the overall rate.
Comment by City Zen Wednesday, Oct 15, 25 @ 10:43 am
- IL is a trash state. Why would anyone live there? -
Strangely more people do than in all of our border states and some of them combined. I guess they just aren’t as smart as you.
Comment by Excitable Boy Wednesday, Oct 15, 25 @ 10:44 am
=And where you are has the highest tax burden in the nation=
=None of those states are losing population, yet Illinois is and has been for a while despite the lies to the contrary. =
Facts really are not something you work with are they?
Fact- Illinois isn’t losing population.
Fact- Illinois does not have the highest tax burden
Fact- In real dollars, Illinois GDP is growing faster than all of the neighboring states.
Fact- The average wage in Illinois ius higher than all of our border states and workers have better protections.
The list goes on. I also note that you do not mention the state in which you reside. I wonder why?
Comment by JS Mill Wednesday, Oct 15, 25 @ 10:59 am
==Illinois and Chicago are already the highest such taxes in the whole Midwest==
The people who think the state’s route to success is by emulating our neighbors like Indiana and Nebraska will never cease to amaze me.
Comment by SWSider Wednesday, Oct 15, 25 @ 11:03 am
==Illinois and Chicago are already the highest such taxes in the whole Midwest==
Has anyone ever read where Aaron Renn talks about Indiana and a race to the bottom? Both in not paying as well as it should for jobs including manufacturing and by not encouraging as skilled of a work force as it should.
Comment by dtownresident Wednesday, Oct 15, 25 @ 11:22 am
Leland Grove is seeking to impose tax on internet sales (think Amazon) that are subject to the combined state and local sales tax rate at the customer’s location.
This has nothing to do with the grocery tax.
Comment by Facts Matter Wednesday, Oct 15, 25 @ 11:31 am
-The list goes on-
Illinois seems to not grow population at the national growth. Thus, it keeps losing Congressional seats after ever census. Go figure…
Comment by Steve Wednesday, Oct 15, 25 @ 11:34 am
===Go figure… ===
“Go west, young man” was first uttered in 1850.
Comment by Rich Miller Wednesday, Oct 15, 25 @ 11:59 am
=at the national growth.=
Can you clarify what you mean here? Yes, most northern states are growing slowly if at all. But That is not the same as losing population which is also not the same as losing congressional seats. The latter not being a good thing for sure.
Comment by JS Mill Wednesday, Oct 15, 25 @ 12:10 pm
According to a friend that owns a sports bar, overall liquor sales are down, people just aren’t drinking out as much as before the pandemic. Weed related sales impacting bars too, but market saturation will level off tax revenues that at some point also.
Comment by NorthSideNoMore Wednesday, Oct 15, 25 @ 12:12 pm
I like living in a place with first-world life expectancy that respects basic human rights.
Comment by Irreverent Wednesday, Oct 15, 25 @ 12:17 pm
==This entire board was just owned. ==
You must be new here.
Comment by Pot calling kettle Wednesday, Oct 15, 25 @ 12:22 pm
The $8.55 liquor excise taxes breaks down to $1.71 for each 750 ml bottle. If it were adjusted for income growth it would be $120 per gallon. So rather than $180 million a year it would generate $2.7 billion.
The $750 Liquor license fee brings in $9 million a year. If it were adjusted for inflation it would be $11,000 a year and bring in $110 million.
Why is it easier for elected officials to raise income, death and grocery taxes than alcohol taxes?
Comment by Jack in Chatham Wednesday, Oct 15, 25 @ 12:27 pm
The state has no business collecting a tax for local taxing bodies. Locals got free money and voters complained state taxes are too high. If local voters want it they can approve it. There are way too many local government units that need to consolidate.
Comment by GoneFishing Wednesday, Oct 15, 25 @ 12:29 pm
==Don’t care how much other states lie about their trains being on time. I’ll put up with a lot so that all of my neighbors are still people.==
Well said.
Comment by Leslie K Wednesday, Oct 15, 25 @ 12:45 pm
==There are way too many local government units that need to consolidate.==
Of which the forementioned Leland Grove is one of them.
Comment by Leatherneck Wednesday, Oct 15, 25 @ 12:49 pm
===If it were adjusted for income growth it would be $120 per gallon.===
Dear Jack, a $24 per 750ml bottle excise tax?
Do you want bootleggers? Because that’s how you get bootleggers.
Comment by Candy Dogood Wednesday, Oct 15, 25 @ 1:13 pm
Illinois property taxes are extraordinarily high. Some sources say #1 highest in the nation for effective tax rate. Income tax is on the higher end but nowhere close to some states. Gasoline taxes are 2nd highest in nation.
Yet, pensions and SS are tax exempt as are RMD withdrawals and that is huge for retirees. And a reason a number of retirees stay in the state- particularly when they have family here.
Comment by Mason County Wednesday, Oct 15, 25 @ 1:52 pm
@Candy If the Liquor license fee was $11,000 rather than $750, there would be $100 million more dollars to enforce the Liquor regulations.
Comment by Jack in Chatham Wednesday, Oct 15, 25 @ 1:55 pm
- If the Liquor license fee was $11,000 rather than $750 -
Heck, why not make it $110,000?
- there would be $100 million more dollars to enforce the Liquor regulations. -
Are you aware of some major issue with enforcing liquor regulations?
Comment by Excitable Boy Wednesday, Oct 15, 25 @ 2:09 pm
@Leatherneck - the sales tax applies to Amazon and other online sales.
@ChicagoBars - Perhaps the city did not oppose the grocery tax repeal because the Mayor is a Democrat, and like the governor he wants food to be affordable. That probably does not make sense to aldermen who spend $500-$1000 per week at their favorite watering hole, but a grocery tax is pretty regressive and punative.
Illinois Liquor taxes are pretty average.
https://taxfoundation.org/data/all/state/distilled-spirits-taxes/
Comment by Juvenal Wednesday, Oct 15, 25 @ 5:00 pm