Oswego trustees direct staff to draft ordinance to continue 1% grocery tax; board debates rebate vs. general fund use

Village of Oswego trustees on Sept. 2 directed village staff to prepare an ordinance to implement a 1% local grocery (food) sales tax beginning Jan. 1, 2026, and debated how to allocate the roughly $1 million in annual revenue the village currently receives.

Andrea (staff member) told trustees that the Illinois General Assembly on Aug. 5, 2024, approved repeal of a state-administered 1% grocery tax effective Jan. 1, 2026, while authorizing municipalities to adopt a local 1% grocery tax by ordinance. Andrea said municipalities that want the tax in place for Jan. 1, 2026, must adopt an ordinance and file required paperwork with the Illinois Department of Revenue by Oct. 1, 2025. "Tonight staff is looking for direction from the board on bringing back an ordinance to continue the 1% local grocery tax at the local level," Andrea said.

President Kauffman acknowledged it is not a new tax and said residents will not see a tax increase from the proposal: "So no matter what action the board takes this evening, there is not going to be 1¢ of increase ... This is solely about keeping a tax that has been around for 35 years." Trustees expressed broad support for directing staff to return with an ordinance at the Sept. 16 meeting so the village can meet the Oct. 1 filing deadline.

Why it matters: The village received about $914,000 in grocery tax revenue in 2023 and about $967,000 in 2024, Andrea said. Staff and trustees said roughly half of grocery purchases in Oswego are made by nonresidents; keeping the tax locally would preserve an ongoing revenue stream that helps relieve pressure on homeowners and renters. Trustees and staff said the village is facing increased…