What you need to know about the local grocery tax most suburbs are adopting

On a single night last week, officials in Buffalo Grove, Carol Stream, Des Plaines and Lake Zurich voted to adopt their own local grocery taxes, joining a growing list of others enacting the same in neighboring communities.

If you’ve been wondering why, or questioning the rush to action, here’s what you need to know:

How we got here

Illinois will eliminate its 1% grocery tax on Jan. 1, joining the majority of states without one.

Basically, the state collects the tax and distributes it back to the municipalities where it was collected. In recent years, the tax has generated an estimated $360 million for Illinois’ 1,294 cities, towns and villages.

Statements by Gov. JB Pritzker during the early months of 2024 led municipal leaders to anticipate the elimination of the tax. A compromise struck in late spring allowed towns to replace the state tax with ones of their own.

The new law allows municipalities to set up a seamless transition of the tax to their local control ahead of Jan. 1.

Who’s in

Most suburbs already have adopted the tax or are strongly considering it.

Brad Cole, CEO of the Illinois Municipal League, said his agency is recommending all cities and villages go with a grocery tax. So far, there is no up-to-date list of Illinois towns that have done so.

Some — including Palatine, Hoffman Estates and South Barrington — approved the tax as early as last December. Wheaton, Lake Zurich, Buffalo Grove, Carol Stream, Des Plaines and Algonquin did so this month.

Lake Barrington, Naperville, Prospect Heights and Batavia have committed to seriously considering the tax.

Many argue the revenue is too large to lose. Des Plaines identifies its share as about $1.4 million; in Schaumburg, it’s about $4 million.

Hanover Park Mayor Rod Craig, who is this year’s president of the Northwest Municipal Conference, said if his village had to give up the tax’s $600,000 to $700,000 per year it probably would have to raise property taxes — something he’s long been loath to do.

Who’s out

The list of suburbs that have ruled out a local grocery tax for 2026 is very short.

Both Bartlett and Streamwood leaders have decided their current mix of revenue streams is sufficient for now, and they won’t be pursuing a tax at this time.

Though the two are neighbors, Bartlett Assistant Village Administrator Scott Skrycki said the decisions were made independently. He also emphasized his village board’s decision was for 2026 alone and did not try to predict changing circumstances years down the road.

Some suburbs, such as North Barrington, have no grocery stores to tax.

But despite the recent flurry of activity, municipalities have until Oct. 1 to pass an ordinance and submit it to the state to continue receiving the money on Jan. 1.

What’s taxed

To what products does a grocery tax actually apply?

They’re generally defined as food to be consumed off the premises where it is sold.

Exceptions include food prepared for immediate consumption — whether in a restaurant or takeout — as well as alcoholic beverages, soft drinks, candy and food infused with cannabis. These still are governed by the state’s general sales tax rate of at or above 6.25%.

The Illinois Department of Revenue still will collect the grocery tax on behalf of those municipalities that enact it to ensure a streamlined process for stores.

⋅ Daily Herald staff writers Russell Lissau and Katlyn Smith contributed to this report.