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Staff recommends not adopting local 1% grocery tax; committee declines to pursue
Summary
County staff told the Financial Administrative Committee that Lake County would collect only about $155,000 in grocery-tax revenue from unincorporated areas if it imposed the 1% grocery tax authorized by state law; the committee declined to pursue the tax at this time.
County administration advised the Financial Administrative Committee on Aug. 28 that the 1 percent state grocery tax will be eliminated statewide effective Jan. 1, 2026, under Public Act 103-0781, and that the new law authorizes local governments to adopt an equivalent local grocery tax. Patrice Sutton, county administrator, said staff is not recommending the county implement the tax for Jan. 1, 2026, because the county currently budgets roughly $6,000,000 for municipal taxes in unincorporated areas but only about $155,000 of that amount derives from grocery sales in unincorporated Lake County. Given the relatively small revenue projection and the regressive nature of grocery taxes, staff recommended not moving forward at this time. Sutton noted the county could implement the tax later (twice per year windows): to take effect in July (file by April) or to take effect in January (file by Oct. 1). Committee members said the symbolic cost and regressivity of the tax outweigh the small revenue gain and indicated they did not want staff to pursue an adoption for the upcoming deadlines.
