Oswego trustees at a Committee of the Whole meeting on Tuesday will discuss the merits of implementing a 1% local grocery tax to offset the loss of revenue from an expiring state grocery tax.
The Illinois General Assembly last summer voted to eliminate the state grocery tax and Gov. JB Pritzker signed it into law in August.
The repeal of the 1% state grocery tax will take effect Jan. 1, 2026, Oswego Finance Director Andrea Lamberg said in a report to trustees.
Municipalities can implement a 1% municipal grocery sales tax by ordinance as part of the state legislation, she said. However, municipalities have only until Oct. 1 to adopt an ordinance to ensure timely filing with the Illinois Department of Revenue, Lamberg said.
“Using actual 2024 sales tax data received from businesses that sell groceries, staff estimates the village received $1 million to $1.25 million in (state) grocery tax revenue in 2024,” Lamberg said.
“Implementing a 1% local grocery tax will maintain the village’s revenue base,” she said.
If approved, options would include continuing to direct grocery tax money to the village’s general fund or to allocate the revenue to the water and sewer capital fund.
“Keeping the grocery tax for water debt service would save the typical resident $8.33 per month and $100 per year,” the finance director said.
Several municipalities have already passed a local grocery tax ordinance or plan to do so, she said.
The Montgomery Village Board unanimously approved a 1% local grocery tax at its April 14 meeting and city of Yorkville staff members have indicated they are making a recommendation to their board to pass the tax, Lamberg said.
“As of January 2025, 46 towns in Illinois had already passed a 1% local grocery tax, offsetting the revenue loss from the state’s tax repeal,” she said.
Staff is looking for direction from trustees at the Tuesday meeting about the possibility of a local grocery tax.
Linda Girardi is a freelance reporter for The Beacon-News.
