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Indian Head Park trustees discuss adopting local grocery tax to replace expiring state levy
Summary
With the statewide grocery tax set to expire Dec. 31, 2025, village staff recommended adopting a local 1% groceries tax by Oct. 1 to avoid losing roughly $35,000–$45,000 in annual revenue; trustees asked staff to research a grocery/restaurant split for mixed-use stores.
Village staff told trustees the statewide grocery tax will expire Dec. 31, 2025, and that local governments may adopt a local 1% grocery tax to replace the revenue. The village manager said the village could lose an estimated $35,000 to $45,000 annually if it does not adopt a local tax.
Trustees asked staff to confirm which stores are in the tax base and whether stores with substantial prepared-food operations would still be taxed as groceries; the village manager said he would investigate how changes in a store’s offerings (for example, a larger restaurant component inside a convenience store) would affect taxable status. He said adoption should occur by Oct. 1 if the village wants to preserve the revenue stream.
The board gave direction for staff to prepare ordinance language and follow-up analysis on taxable items and the timing required for adoption. No ordinance was introduced at the meeting.
