With elections behind and budgets ahead, suburbs start enacting grocery taxes

Now that suburban elections are over and new fiscal year budget cycles are set to begin, more and more municipalities have begun to enact local grocery taxes to replace a state tax due to expire at the end of the year.

Towns have until Oct. 1 to approve ordinances and notify the Illinois Department of Revenue, which would continue to collect a 1% sales tax on groceries and remit the revenue back to local governments.

The state has administered the tax collection and distributed the money to coffers of cities and villages since 1990, but Gov. JB Pritzker signed a bill last August eliminating the statewide tax effective Jan. 1, 2026.

The legislation, however, provided municipalities the authority to implement the same 1% tax on grocery items.

By February, more than 45 towns across the state had already done so, and the number has continued to grow in recent days and weeks.

Elk Grove Village and Wheaton officials approved ordinances this week, while Des Plaines aldermen took a preliminary first reading vote. Lombard trustees are set to vote later this month, along with scheduled discussions of boards in Buffalo Grove and Rolling Meadows. Palatine, Bannockburn and Burlington were among the early adopters late last year.

“The reason you’re probably seeing a wave right now is you’ve got a lot of municipalities going through their budget process, especially if they’re on a May 1 budget,” said Larry Bury, deputy director of the Northwest Municipal Conference, a Des Plaines-based regional consortium representing 42 suburban municipalities and one township. “So they’re looking at what are their revenues going to look like for the coming fiscal year and then they’re making that decision on it.”

The timing of the May 1-April 30 budget cycle is what led to Elk Grove Village’s vote Tuesday to implement its local grocery tax. On the same night, the village board approved the $253 million annual budget.

Officials say the grocery tax brings in $1.2 million every year from sales at Elk Grove stores such as Jewel, Aldi, Walmart and wholesalers with retail outlets in the business park like Northstar Foods.

That money isn’t earmarked to anything specifically, but is part of the overall general fund that pays for everything from police and fire protection to capital projects and services, officials said.

“I talk to mayors all the time. Almost all the towns are going to do it,” said Elk Grove Village Mayor Craig Johnson. “The thought is this: It’s an existing tax. We’re not increasing. We’re not changing. We’re just leaving the existing tax. … To me, it’s not a big deal.”

“It’s a tax that’s been there forever,” Johnson added. “It’s going to continue to be there now forever.”

In Des Plaines, council members voted 7-1 to advance the creation of a local grocery tax to a second and final vote as soon as April 21.

“I'm willing to pay it,” Sixth Ward Alderman Mark Walsten said.

At the Wheaton Meat Co., a Main Street institution in the city, business president Brett Joseph said eliminating the grocery tax would be “what everybody ultimately wants” and help both consumers and small businesses thrive more.

Northwest Municipal Conference as an organization lobbied against repeal of the state tax last summer, but the decision whether to enact a local tax is up to the elected officials in each town, said Bury.

“That’s a decision each municipality has to make on their own,” he said. “Some are in a better position to absorb the budgetary impact it would have. If they don’t have a lot of revenue they’re getting from groceries, maybe this is something they could forego. But you get some towns that bring in several million dollars off of the grocery tax, and that is very difficult for them to replace in their budgets.”

· Staff writers Russell Lissau and Katlyn Smith contributed to this report