Addison staff, mayor and trustees move to eliminate vehicle stickers, reject grocery tax and raise local sales tax rate

Village staff presented and trustees advanced changes to local revenue policies Monday, March 3, including a first reading to repeal the village—s motor vehicle and motor bicycle sticker requirement effective Oct. 1, 2025; adoption of a resolution declaring the village will not enact a 1% grocery tax after the state repeal; and a proposed quarter-percentage-point increase in the village—s home-rule municipal retailers occupation tax and home-rule municipal service occupation tax from 1.5% to 1.75% effective July 1, 2025.

The changes were presented as a package: staff told trustees the vehicle-sticker fee historically supported road maintenance but that recent resident feedback and administrative costs outweigh the benefits. "The proposed ordinance eliminates the annual license fee and vehicle sticker requirements effective 10/01/2025," a village staff member said during the committee meeting. The board advanced that ordinance on first reading at the Village Board meeting.

Staff and trustees said they are proposing the 0.25-percentage-point sales-tax increase to offset revenue losses from eliminating the sticker program and from the state—s removal of the 1% grocery tax. "The elimination of the vehicle sticker program will result in significant reduction to the village's annual revenue," a village staff member said, and staff estimated the statewide grocery-tax removal accounted for roughly $1,000,000 of revenue in 2024.

Mayor Veenstra emphasized the state—s role in the change: "that 1% tax that was being collected by the state would be remitted had been remitted directly to the municipalities. So when the state decided to eliminate the tax, they essentially took a 1% sales tax away from municipalities." The village—s recommendation, he and staff said, was to avoid reimposing the grocery tax on residents and instead consider broader sales-tax adjustments that also capture purchases by nonresidents who shop in Addison.

Trustees voted in committee and at the board to advance the items as described: the board adopted a resolution stating the village will not enact the 1% grocery tax and held first readings on the vehicle-sticker repeal and the ordinance amending Chapters 8 (retailers occupation tax) of the Village Code. The staff presentation also noted the sales-tax increase would apply to all transactions in the village, including sales by nonresidents who come into Addison to shop.

What happens next: the vehicle-sticker repeal and the sales-tax ordinance were at first reading at the board meeting and will return for further consideration or adoption in a later meeting. The grocery-tax resolution was adopted by roll call. Staff indicated the sales-tax increase is intended to replace specific lost revenues, including the roughly $1 million from the grocery-tax repeal and the revenue previously collected through the vehicle-sticker program.

Votes at committee and board: the committee recommended approval of the ordinance to repeal vehicle stickers and the sales-tax amendment and the board completed first readings; the board adopted the resolution opposing a grocery tax. Specific formal vote tallies by named trustees were not provided in every instance in the transcript; motions were recorded as carrying at committee and the resolution was approved by roll call at the board meeting.

Clarifying details from the meeting record: the vehicle-sticker requirement is proposed to be eliminated effective 10/01/2025; the state grocery tax repeal is effective January 2026 (per staff remarks); the proposed tax change raises both the Home Rule Municipal Retailers Occupation Tax and the Home Rule Municipal Service Occupation Tax from 1.50% to 1.75% effective 07/01/2025; staff cited approximately $1,000,000 in revenue related to the statewide grocery tax in 2024; the sales-tax increase is described by staff as a quarter-percent increment (0.25%).

The board and staff framed the package as a tradeoff intended to reduce administrative burdens on residents while preserving village services by broadening the tax base. Further committee or board action will be required before the ordinances take effect.