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Hinsdale trustees discuss municipal grocery tax as state repeal nears; first reading held
Summary
Board members reviewed a proposal to impose a 1% municipal grocery sales tax to replace a state-collected tax that will expire Jan. 1, 2026; staff said the village received roughly $655,000 from the state tax in 2024.
Village officials on April 15 presented a first reading of an ordinance to impose a 1% grocery sales tax on groceries consumed off premises, matching a state tax that will be repealed effective Jan. 1, 2026.
Village President Matt said the state currently collects the 1% grocery sales tax and remits the revenue to municipalities; in Hinsdale the tax generated an estimated $655,000 in 2024. He said the state budget included repeal language that takes effect Jan. 1, 2026, and that the legislature permitted municipalities to adopt their own equivalent tax with state collection continued on the municipality's behalf.
"If we don't impose our own grocery sales tax, we would be losing, you know, say $650,000 of revenue that we were otherwise getting," Village President Matt said. He described the proposal as revenue-neutral for residents because it would replace, rather than add to, the current tax collection mechanism.
Carrie, a village staff member, answered a question about state administration fees by noting that while the state withholds an administration fee from overall sales tax distributions today, staff understood that the state would not withhold an administrative fee from the 1% grocery tax under the new arrangement.
The item was presented as a first reading; no final vote to adopt the municipal grocery tax was recorded at the meeting. The board did not finalize an ordinance at this session; staff flagged the Jan. 1, 2026 effective date in public discussion and noted the need to finalize implementing ordinance language and administrative details before that date.
If the board adopts a municipal grocery tax before the state repeal, the village would continue to receive roughly the same revenue streams it has been receiving, according to staff comments. Trustees asked clarifying questions about collection mechanics and administrative costs; staff said they would follow up on implementation specifics.
Next steps: the item will return for additional review and a subsequent ordinance vote before a municipal implementation date, if the board decides to proceed.
