Title
An Ordinance Creating A New Chapter 26 (Imposing A Grocery Tax), of Title 7, of The Orland Park Village Code.
HISTORY
Beginning January 1, 2026, Illinois will repeal the statewide 1% grocery tax and instead allow municipalities to implement a local 1% grocery sales tax as a replacement.
To ensure uninterrupted sales tax revenue from these items, staff propose that the Village Board adopt an ordinance to impose a local grocery tax. The Illinois Municipal League drafted a model ordinance that is being used by several other municipalities. To be effective January 1, 2026, a certified copy of the ordinance must be submitted to the Illinois Department of Revenue (IDOR) by October 1, 2025. If no action is taken, the grocery tax will be automatically repealed within the municipality and the Village would lose that revenue.
There is no anticipated impact on consumers as this is the same percentage currently being paid. Prepared foods, alcohol, tobacco, and dietary supplements are exempt from the tax.
This tax will be collected and administered by the Illinois Department of Revenue, consistent with other local sale taxes. Many municipalities have already adopted their own grocery tax (see attached summary).
Given the Village's ongoing efforts to maintain essential services, meet growing infrastructure and operational costs, pay off debt, and plan for long term fiscal sustainability, staff recommends the continuation of a 1% local grocery tax. The Village currently generates approximately $4.5 million annually in grocery tax.
RECOMMENDED ACTION/MOTION
I move to adopt an Ordinance entitled: AN ORDINANCE CREATING CHAPTER 26, OF TITLE VII, OF THE MUNICIPAL CODE IMPLEMENTING A MUNICIPAL GROCERY RETAILERS’ OCCUPATION TAX AND MUNICIPAL GROCERY SERVICE OCCUPATION TAX IN THE VILLAGE OF ORLAND PARK.