Gurnee trustees approved raising the village's home rule sales tax by 0.5 percent
Gurnee will no longer have a grocery tax, starting Jan. 1, but the Village voted to increase its home rule sales tax by 0.5% at its June 16 Village Board meeting.
The increased sales tax was unanimously approved by Gurnee's Village Board.
'This is an idea that is exceptional,' said Trustee Kevin Woodside. 'The fact that the State of Illinois has eliminated the 1% grocery tax has put most home rule communities in a position to reinstate that tax, but we are positioned, very smartly, I think, to shift half a percent of our sales tax to supplant that, and develop a surplus.'
After passing House Bill 3144, Illinois is eliminating its 1% grocery tax, but is allowing municipalities to make up that funding by either implementing their own grocery tax or increasing other taxes. Most groceries are currently taxed at 1.75%, with 1% being returned to municipalities and 0.75% going to the Regional Transportation Authority.
The new law covers a majority of food items that can be purchased in a grocery store, but does not include alcohol, candy, soft drinks and foods consisting of, or infused with, adult-use cannabis. Those items will continue to be taxed when purchased throughout Illinois.
The state's repeal of the grocery tax goes into effect on Jan. 1, 2026, and municipalities throughout Illinois had until October 1 to approve a tax that would replace it, if they wanted the tax to be in effect when the state tax is repealed.
'The grocery tax, for us, is between $2 (million) and $2.5 million,' said Patrick Muetz, Gurnee's Village Administrator, about how much revenue the tax brings into the Village each year.
While Gurnee could have implemented its own grocery tax within the Village, it instead opted for an increase in Gurnee's home rule sales tax.
Muetz said that the Village will receive its final grocery tax payment in March 2026 and will start receiving revenue from its increased sales tax in April.
'There would be no gap in funding,' Muetz said.
Gurnee's Finance Director Brian Gosnell gave a presentation at the Village's May 19 board meeting, recommending that Gurnee opt for the 0.5% increase in sales tax, rather than implementing another tax on groceries, as it would alleviate the tax burden on residents.
Muetz said that the primary shoppers at Gurnee's grocery stores are Gurnee residents, more than 'any other retailer.' He also added that 55% of the Village's residents who shop at Gurnee's grocery stores are over the age of 52.
'The only option that we have, from our local taxing authority, to generate a large enough base to replace that revenue would be the home rule sales tax,' Muetz said. 'It fills that gap left by the grocery tax, as well as generates funding needed for capital infrastructure, mainly water and sewer main replacement.'
According to Gosnell, the Village was looking for options that would recoup the revenue lost from the repeal of the grocery tax, and would also cover a $3 million upgrade to Gurnee's water infrastructure, which means that Gurnee was looking to bring in approximately $5.5 million in additional revenue each year, after the repeal of the grocery tax.
'We need to invest more than what we're investing today,' Muetz said about Gurnee's water and sewer main system. 'We've fallen behind on that, and this shifts that burden to visitors of our community.'
According to Muetz, Gurnee residents who do all of their shopping within the village will now be saving approximately $85 per year by the Village switching to increasing its home rule sales tax, rather than implementing a new grocery tax.
'The burden will be shifted to our visitors in a way that won't be felt,' Woodside said. 'It uniquely puts us in a position to give a break to our own residents on food.'
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Gurnee trustees approved raising the village's home rule sales tax by 0.5 percent
Gurnee will no longer have a grocery tax, starting Jan. 1, but the Village voted to increase its home rule sales tax by 0.5% at its June 16 Village Board meeting. The increased sales tax was unanimously approved by Gurnee's Village Board. 'This is an idea that is exceptional,' said Trustee Kevin Woodside. 'The fact that the State of Illinois has eliminated the 1% grocery tax has put most home rule communities in a position to reinstate that tax, but we are positioned, very smartly, I think, to shift half a percent of our sales tax to supplant that, and develop a surplus.' After passing House Bill 3144, Illinois is eliminating its 1% grocery tax, but is allowing municipalities to make up that funding by either implementing their own grocery tax or increasing other taxes. Most groceries are currently taxed at 1.75%, with 1% being returned to municipalities and 0.75% going to the Regional Transportation Authority. The new law covers a majority of food items that can be purchased in a grocery store, but does not include alcohol, candy, soft drinks and foods consisting of, or infused with, adult-use cannabis. Those items will continue to be taxed when purchased throughout Illinois. The state's repeal of the grocery tax goes into effect on Jan. 1, 2026, and municipalities throughout Illinois had until October 1 to approve a tax that would replace it, if they wanted the tax to be in effect when the state tax is repealed. 'The grocery tax, for us, is between $2 (million) and $2.5 million,' said Patrick Muetz, Gurnee's Village Administrator, about how much revenue the tax brings into the Village each year. While Gurnee could have implemented its own grocery tax within the Village, it instead opted for an increase in Gurnee's home rule sales tax. Muetz said that the Village will receive its final grocery tax payment in March 2026 and will start receiving revenue from its increased sales tax in April. 'There would be no gap in funding,' Muetz said. Gurnee's Finance Director Brian Gosnell gave a presentation at the Village's May 19 board meeting, recommending that Gurnee opt for the 0.5% increase in sales tax, rather than implementing another tax on groceries, as it would alleviate the tax burden on residents. Muetz said that the primary shoppers at Gurnee's grocery stores are Gurnee residents, more than 'any other retailer.' He also added that 55% of the Village's residents who shop at Gurnee's grocery stores are over the age of 52. 'The only option that we have, from our local taxing authority, to generate a large enough base to replace that revenue would be the home rule sales tax,' Muetz said. 'It fills that gap left by the grocery tax, as well as generates funding needed for capital infrastructure, mainly water and sewer main replacement.' According to Gosnell, the Village was looking for options that would recoup the revenue lost from the repeal of the grocery tax, and would also cover a $3 million upgrade to Gurnee's water infrastructure, which means that Gurnee was looking to bring in approximately $5.5 million in additional revenue each year, after the repeal of the grocery tax. 'We need to invest more than what we're investing today,' Muetz said about Gurnee's water and sewer main system. 'We've fallen behind on that, and this shifts that burden to visitors of our community.' According to Muetz, Gurnee residents who do all of their shopping within the village will now be saving approximately $85 per year by the Village switching to increasing its home rule sales tax, rather than implementing a new grocery tax. 'The burden will be shifted to our visitors in a way that won't be felt,' Woodside said. 'It uniquely puts us in a position to give a break to our own residents on food.'
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