Lake Zurich among the latest communities to approve local grocery tax to replace expiring state measure
Like dozens of other communities, Lake Zurich will replace the expiring 1% state grocery tax with a local one starting Jan. 1.
Shoppers won’t notice a difference as the local grocery tax will remain 1%, allowing the village to maintain a “critical, stable revenue stream needed for municipal operations.”
Lake Zurich has six or more large grocery stores and receives about $1.3 million annually. That revenue goes into the general fund, which supports core village services including police, fire and public works.
Adoption of a local grocery tax replaces the expiring state sales tax but will not increase the amount of sales taxes paid on groceries, according to a village summary.
The village board without comment Monday approved an ordinance creating the local tax. The measure was part of its omnibus agenda, which generally includes a variety of items approved in a single roll call vote.
Grocery taxes have been collected by the state and remitted to communities for decades. In August, Gov. JB Pritzker signed into law a measure eliminating the state grocery tax on items as of Jan. 1 but giving communities authority to implement their own.
According to village materials, the change has no impact on the state budget but eliminates a stable revenue source on which municipalities and counties rely for funding local government operations.
“Lake Zurich along with many other communities are simply replacing the tax, which would otherwise punch a good-sized hole into our budget,” said Michael Duebner, assistant village manager.
Carol Stream and Buffalo Grove, for example, have just approved local grocery taxes joining dozens of other communities who have until Oct. 1 to approve the local tax and notify the Illinois Department of Revenue.
Many towns have approved or are considering local grocery taxes to keep the revenue intact in 2025-26 fiscal year budgets.