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City council adopts 1% municipal grocery tax with two‑year sunset amendment
Summary
The city council approved a municipal grocery retailers and service occupation tax at 1% after passing an amendment to sunset the tax at the end of the fiscal year in 2028 and require reevaluation before renewal.
The city council voted to adopt an ordinance implementing a municipal grocery retailers occupation tax and a municipal grocery service occupation tax at 1%, and approved an amendment to let the tax expire at the end of the city’s fiscal year in 2028 unless reauthorized.
Councilmember Tom Parchment moved the ordinance on second reading; the council later voted to amend the measure so the tax would “sunset” at the end of the fiscal year on April 30, 2028, allowing the council to reevaluate before deciding whether to continue it. Andrea (councilmember) proposed the sunset amendment, saying it would “force us to reevaluate” the tax in two years as new retail developments and other revenues come online. The amendment passed and the council then approved the ordinance as amended.
Director of Finance Sandy told the council the grocery tax is administered by the Illinois Department of Revenue (IDOR) and that IDOR timing rules affect start and stop dates: a municipality must provide timely notice to IDOR to start or stop such a tax (the discussion identified an October 1 deadline to begin January 1). Sandy also said the local grocery tax, as structured, applies to groceries that are not for immediate consumption and that the state does not retain revenue from the local grocery tax administration.
Supporters and opponents on the council debated whether to impose the new tax now or wait for anticipated revenue from forthcoming projects such as additional hotels and a Meijer store. One councilmember argued the city could revisit the tax without a sunset provision, but others said the sunset provides a formal, time‑bound reassessment.
The ordinance will take effect per the city’s standard implementation schedule; council members said staff will have time before the sunset to report back with revenue data and budget impacts.
Details clarified at the meeting: the tax rate under the ordinance is 1%; the sunset date adopted by amendment is the end of the fiscal year, April 30, 2028; and the city must follow IDOR timelines for implementation or termination notices. No citizen referendum, litigation, or further statutory authority was reported during the discussion.
The council’s action resolves the second‑reading vote on the ordinance as amended; staff will handle required notifications to IDOR and follow‑up financial reporting to the council.
