Yorkville Considers Re-Establishment of Local 1% Grocery Tax

Yorkville is considering an ordinance to re-establish a local 1% grocery tax. The City Council meeting on Tuesday, April 22, 2025, will include the discussion of CC 2025-32, which amends Title 3, Chapter 2 of the Yorkville City Code regarding the grocery tax. This ordinance responds to Public Act 103-0781, which eliminates the statewide 1% sales tax on groceries. The effective date for this change is January 1, 2026.

Illinois Municipal League, August 13, 2024, https://www.iml.org/file.cfm?key=27885

In anticipation of the expiration of the state grocery tax, the Illinois General Assembly enacted a law that gives municipalities and counties the power to impose their own local grocery tax through an ordinance. This enables local governments to preserve a source of revenue that would otherwise be lost when the state tax is eliminated. The local ordinance would redirect this 1% to the City of Yorkville instead of the state.

City documents indicate that the city would face a budget shortfall of over $300,000 if the grocery tax is not re-established. Yorkville staff indicated that this would further impact revenue loss from non-residents patronizing the proposed Costco and lengthen the payoff period of the incentive agreement with Costco.

The Illinois Municipal League (IML) asserts that it played a role in securing local authority to impose a grocery tax without a referendum. IML has been actively informing and assisting municipalities in this process, even providing template ordinances for consideration. The IML emphasizes that this is not a new tax for residents but rather a continuation of an existing one at the local level, preventing a potential decrease in municipal revenue.

According to the Illinois Department of Revenue, municipalities intending to implement a local grocery tax to take effect on January 1, 2026, must pass an ordinance and submit it to the state by October 1, 2025.