Committee of the Whole

Village of Brookfield Agenda Committee of the Whole Meeting Monday, June 23, 2025 @ 7:00 PM or Immediately Following Village Board Meeting Edward Barcal Hall 8820 Brookfield Avenue Brookfield, IL 60513 I. ROLL CALL II. REGULAR BUSINESS 1. Discussion of a Resolution to Adopt an Economic Incentive Policy Draft Economic Incentive Policy 2. Establishment of a Municipal Grocery Sales Tax Draft Ordinance for Municipal Grocery Sales Tax III. PUBLIC COMMENT IV. EXECUTIVE SESSION V. ADJOURNMENT Page 1 of 28  Committee Item Memo Meeting Date: June 23, 2025 Staff Contact: Libby Popovic, Community Development Director Department: Community Development Subject: Discussion of a Resolution to Adopt an Economic Incentive Policy Background Information: On May 22, 2025, the Economic Development Commission reviewed establishing a more comprehensive written Economic Incentive Policy to address all available incentives and address evolving development needs. With a unanimous vote of 8-0, the Commission favorably recommended the Board to consider adopting a formal Economic Incentive Policy. Such a policy would be used as a strategic tool to support Brookfield’s efforts to attract investment, retain and grow local businesses, and encourage redevelopment in the Tax Increment Finance Districts (Eight Corners, Grand/Prairie, Congress Park, Ogden) as well as other non-TIF areas in the Village. It would establish clear guidelines for reviewing and evaluating incentive requests based on the specific context of each project. It also builds upon existing programs. Brookfield currently has three incentives being utilized (1) TIF (2) PIP – Property Improvement Program (3) Brookfield Shops – Retail Incubator Program. As staff continue to evaluate and evaluate Brookfield's economic development toolkit, it has become clear that the three existing economic incentive policies in place do not fully reflect the range of incentives that the Village is capable of offering. A well-rounded Economic Incentive Policy could encompass a variety of additional incentives to support and encourage development throughout Brookfield as detailed in the draft policy. These could include: 1. Property tax abatements, which offer temporary reductions in property taxes; 2. Sales tax rebates that return a portion of sales tax generated by businesses; 3. TIF assistance, which uses incremental property tax revenue from designated districts to fund project costs; 4. Fee reductions or waivers for building permits or utility connections; 5. Grants or loans providing direct financial support for eligible projects; 6. Infrastructure assistance involving public improvements such as roads, water, and sewer systems and; 7. Grocery Store Incentives. The proposed policy provides a structured, transparent approach for evaluating incentive requests and advancing the Village’s long-term economic development goals. It further establishes clear guidelines for reviewing and evaluating incentive requests based on the Page 2 of 28 specific context of each project. It builds upon existing programs, such as the Property Improvement Program, and introduces more flexible tools to support business needs. Policy Objectives:  Retain, expand, and attract commercial and industrial businesses  Promote business growth and increase municipal revenues  Encourage redevelopment of underutilized or blighted properties  Prioritize incentives for projects with strong public benefit Guiding Principles  The Village will apply this policy using the following guiding principles:  Strategic Alignment  Transparency and Consistency  Public Benefit  Leverage of Private Investment  Accountability Incentive Programs The following incentive programs are outlined within the draft Economic Incentive Policy and are each subject to a separate application process with further information provided. Applicants must submit individual applications for each program they wish to pursue, in accordance with the specific guidelines and eligibility requirements of each incentive. A. Tax Increment Financing Incentives B. Property Improvement Program - (1) Business Signage and Awning Grant and (2) Facade and Renovation Improvement Grant C. Sales Tax Incentive Program D. Property Tax Rebate E. Cook County Tax Abatement Programs - 6B, 7A, 7B F. Grocery Store Incentive G. Customized Development Agreements H. Retail Incubator Incentive Program The Economic Development Commission recommends a review of the proposed draft to implement a comprehensive Economic Incentive Policy. Page 3 of 28 Financial Impact: None Recommendation(s): Staff recommends consideration of an Economic Incentive Policy Attachment Description: Draft Economic Incentive Policy Attachments: DRAFT Economic Incentive Policy 6.23.25 Page 4 of 28  DRAFT Village of Brookfield Economic Development Incentive Policy I. INTRODUCTION The Village of Brookfield is committed to promoting a thriving, diverse, and sustainable economy. This Economic Development Incentive Policy Plan serves as a formal framework to guide the use of financial tools that encourages the attraction, retention, and expansion of private businesses. The overarching purpose of this policy is to stimulate targeted growth in a way that is fiscally responsible, strategically aligned with community goals, and reflective of Brookfield's long-term vision. This policy is consistent with the Village of Brookfield's Comprehensive Plan and Sustainability Plan. It ensures that future development supports not only economic prosperity but also environmental stewardship and social equity. The Village aims to use public incentives in a manner that is transparent, equitable, and accountable, maximizing the return on public investment and reinforcing Brookfield as a desirable place to live, work, and invest. The Village of Brookfield offers an array of incentive programs for new and expanding businesses. The following tools are available for business success: Property Improvement Incentives, TIF Incentives, and Sales Tax Incentives. These programs are designed to assist a wide selection of qualifying organizations in various stages of their economic growth and as such, a return on investment through jobs, tax revenue, community cooperation, and capital investment is expected. II. DEFINITIONS • Economic Development Incentive Policy: A strategic document that outlines the guidelines and criteria for providing financial assistance to businesses in order to foster economic growth, redevelopment, and community investment. • Tax Increment Financing (TIF): A tool used to capture increases in property tax revenue generated by new development within a designated area, which is then reinvested into that area. • Pay-As-You-Go: A reimbursement model where developers are reimbursed a portion of eligible expenses only after the Village receives incremental tax revenue generated by the project. Page 5 of 28  • Sales Tax Rebate: A financial incentive in which a portion of new sales tax revenue generated by a project is rebated back to the developer over a fixed period of time. • Property Tax Rebate / Abatement: A temporary reduction or refund of property taxes, evaluated on a case-by-case basis for eligible developments. • Claw-back Provision: A contractual obligation that requires repayment of incentives if certain agreed-upon performance benchmarks are not achieved. • Development Agreement: A formal contract between the Village and a developer that may include various negotiated terms and commitments such as fee waivers, expedited approvals, and public infrastructure support. III. GUIDING PRINCIPLES The Village of Brookfield will apply this policy using the following guiding principles: 1. Strategic Alignment: Incentives must support the goals of the Village's Comprehensive Plan and Sustainability Plan. 2. Transparency and Consistency: All incentive applications will be subject to a clear and consistent review and approval process. 3. Public Benefit: Incentives should result in measurable community benefits such as job creation, increased tax revenues, or elimination of blight. 4. Leverage of Private Investment: Public investment must be matched or exceeded by private investment. 5. Accountability: Incentives will include performance measures, regular reporting, and claw-back provisions to ensure compliance. IV. INCENTIVE PROGRAMS A. Tax Increment Financing (TIF) Incentives TIF incentives will be available within the four designated TIF Districts: Grand Boulevard, Congress Park, Eight Corners, and Ogden Avenue. These incentives will follow a Pay-As- You-Go model with the following terms: 1. Developers may be reimbursed a portion of eligible costs only after the Village receives the tax increment. 2. Incentives will be capped at 50% of the eligible tax increment. Developers may not receive more than 50% of the total tax increment generated by the project unless a hardship or extraordinary circumstance is demonstrated and approved by the Village. 3. The incentive term will be limited to a maximum of ten (10) years to minimize long- term risk to the Village. Page 6 of 28 B. Property Improvement Program (PIP) The Property Improvement Program (PIP) consists of two separate grant opportunities available to qualifying commercial properties within TIF districts. 1. Business Signage and Awning Grant o Reimburses up to 50% of eligible expenses, up to $2,000. o Eligible expenses include removal and installation of signage and awnings. o Requires a minimum three-year lease and includes a prorated recapture clause. 2. Facade and Renovation Improvement Grant o Reimburses up to 50% of eligible expenses, up to $20,000. o Eligible expenses include exterior renovation, lighting, landscaping, utility screening. o May be awarded once every ten years per property. o This incentive can be combined with the Business Signage and Awning grant. C. Sales Tax Incentive Program The Village may provide a rebate of sales tax revenues to assist private developments that demonstrate significant projected economic impact. 1. Applicants must show financial infeasibility without Village support, determined by the Village Manager or appointed designee. 2. Projects must generate significant sales tax revenue and economic activity. 3. Developers must demonstrate experience, creditworthiness, and operational capability. 4. Private debt and equity financing must be exhausted first. 5. Rebates will be a minimum of a 50/50 split with the Village, for no more than ten (10) years. 6. Claw-back provisions apply to underperforming projects. 7. The Village reserves the right to modify, amend, suspend or terminate any provision of this incentive at its sole discretion. D. Property Tax Rebate The Village of Brookfield recognizes the strategic value of encouraging investment, redevelopment, and job creation within its municipal boundaries. This policy outlines the terms under which the Village may offer property tax rebates or abatements as an economic development tool to support high-impact projects that align with the Village’s long-term planning, land use and fiscal goals. Term limits: Page 7 of 28  1. Maximum Term: Incentives shall not exceed five (5) years in duration. 2. Village may consider an extension of the maximum term at its sole discretion. 3. Phase-Out Option: The Village may choose to phase out the incentive over time (e.g. a sliding scale rebate of 100% in year 1 down to 20% in year 5) Eligibility Criteria: Applicants must demonstrate that the proposed project: • Will result in a minimum private investment of $500,000 for commercial or mixed -use developments, or $1,000,000 for industrial developments. • Is located in a priority development area, as defined by the Village and the Comprehensive Plan, including but not limited to tax increment financing districts, business corridors, or designated redevelopment areas. • Will lead to the creation or retention of permanent, full-time jobs and/or generate significant sales tax or other revenue benefits to the Village. • Would not reasonably occur but for the provision of the requested incentive (“but-for” test). • Is in compliance with all Village codes, zoning ordinances and building requirements. Application Process: 1. Pre-Application Meeting: Required meeting with Village Manager, or designee, to discuss eligibility and required documentation. 2. Formal Application: Submission of a complete incentive request package, including: a. Project description and site plan b. Pro form financials and funding sources c. Timeline and projected job creation d. Evidence of financial need 3. Village Review: Staff review and, if approved, followed by presentation to the Village Board is required. Performance and Clawback 1. Incentive agreements shall include performance benchmarks related to investment, job creation, and timeline adherence. 2. The Village reserves the right to revoke or modify the incentive and require repayment (clawback) of previously granted benefits if the recipient fails to meet agreed-upon obligations. Transparency and Reporting: Annual reports may be required from incentive recipients to demonstrate ongoing compliance. Page 8 of 28 E. Cook County Tax Abatement Programs Brookfield supports the strategic use of the Cook County property tax classification incentives programs. These programs provide temporary reductions in property ta assessments for qualifying properties, thereby encouraging redevelopment and private investment in underutilized or lighted areas. 1. Class 6B – For industrial properties involving new construction, rehab, or re- occupancy of long-vacant buildings. Applicable along Ogden Avenue and 47th Street. Eligible projects include new construction, substantial rehabilitation, or reoccupation of abandoned industrial facilities. The property must be used for industrial purposes, demonstrate economic benefit to the community and be endorsed by the Village Board via resolution. Assessment Reduction: 10% of fair market value for 10 years 15% in Year 11 20% in Year 12 Reverts to standard 25% thereafter 2. Class 7A (small projects)-For new commercial construction or substantial rehabilitation in areas in need of revitalization. Site must be in an area determined to be in need of commercial revitalization, project must generate permanent employment or economic benefit and be endorsed by the Village Board via Resolution. Assessment Reduction 10% of fair market value for 10 years 15% in Year 11 20% in Year 12 Reverts to standard 25% thereafter 3. Class 7B – (Larger Project) For commercial redevelopment areas needing revitalization. New construction or substantial rehab of commercial facilities with Page 9 of 28  higher investment thresholds. Project must have substantial redevelopment costs, location must be in underperforming commercial area, long term job creation potential must be present and Village support must be secured via resolution. Assessment Reduction 10% of fair market value for 10 years 15% in Year 11 20% in Year 12 Reverts to standard 25% thereafter The Village will provide case-by-case resolutions of support and guidance throughout the application process. 1. Pre-Application Meeting: Applicants must meet with Village Manager or designee prior to submission to discuss eligibility and required documentation. 2. Formal Application Submission: Applicants must submit the following: Completed Cook County Tax Incentive application; site plans, project description and construction schedule; Evidence of site control or ownership; estimated total investment and job creation numbers; explanation of why the incentive is necessary (“but-for” test) 3. Staff Review and Recommendation: The Village will evaluate the proposal based on alignment with economic development goals and the Comprehensive Plan, land use plans and public benefit. Staff may request additional financial documentation. 4. Village Board Consideration: A resolution of support must be adopted by the Village Board in order to submit a qualifying application to Cook County. 5. Filing with Cook County Assessor: Upon adoption of the resolution, the applicant may proceed with filing the required materials with the Cook County Assessor’s Office for formal consideration. F. Grocery Store Incentive The Village of Brookfield recognizes that access to fresh food and essential grocery items is a critical copoint of a healthy, vibrant and economically stable community. This policy is intended to support the development or substantial renovation of: • Full Service grocery stores • Specialty or ethnic food grocers with a broad inventory • Cooperative or community supported grocery models • Small-format urban groceries with produce, meat, dairy and staple offerings. Page 10 of 28 Convenience stores, gas station markets and liquor only retailers are not eligible under this policy. Must demonstrate need and benefit to the community. 1. Incentives may include TIF, sales tax rebates, or other tools, such a permit and fee waivers or reductions, façade or site improvement grants and expedited entitlement process. 2. Emphasis is placed on projects that address food deserts and promote health outcomes. G. Customized Development Agreements Brookfield may enter into custom development agreements incorporating: 1. Permit fee waivers. 2. Expedited permitting and plan review. 3. Public infrastructure investments. 4. Land write-downs or discounted acquisition costs. All agreements must be approved by the Village of Brookfield and include performance standards and legal safeguards. H. Brookfield Shops Retail Incubator Program The Brookfield Shops Retail Incubator Program provides reduced-rent space and business support to entrepreneurs during special program periods. 1. Targets new, home-based, or expanding businesses. 2. Offers marketing support, networking, and business mentoring. 3. Provides 3–6 months of low-cost access to retail space. 4. Requires business compliance with licensing and insurance, and regular operating hours. 5. Offers a launchpad into long-term leasing and eligibility for other incentive programs. The incubator activates vacant retail, supports entrepreneurship, and strengthens commercial vitality in Brookfield. V. APPLICATION AND APPROVAL PROCESS 1. Schedule a pre-application meeting with the Community Development Department. 2. Submit a complete application with project description, site control, financials, and impact analysis. Page 11 of 28  3. Village staff evaluates the application for feasibility, benefit, and alignment. 4. Staff negotiates and drafts an incentive agreement with benchmarks and claw-back terms. 5. Village Board reviews and approves the agreement. 6. Funds are disbursed upon performance milestone completion. 7. Annual monitoring is conducted. Non-compliance may trigger repayment. VI. TRANSPARENCY AND OVERSIGHT All agreements will be publicly disclosed and must be approved by the Village Board. An annual report will summarize active and completed agreements. The Community Development Department will conduct periodic audits to ensure integrity and alignment with public goals. VII. POLICY REVIEW AND UPDATES This policy will be reviewed annually to maintain alignment with best practices and Village planning documents. Revisions will be submitted to the Village Board for approval as needed. The Village reserves the right to modify, amend, suspend or terminate any provisions of this policy at its sole discretion. This includes, but is not limited to, adjustments to incentive amounts, duration, eligibility criteria, and program limits, as deemed necessary to serve the best interests of the Village and to respond to specific development opportunities, market conditions, or fiscal considerations. Any such modifications shall not affect executed agreements unless otherwise agreed to in writing by all parties. Page 12 of 28  Committee Item Memo Meeting Date: June 23, 2025 Staff Contact: Doug Cooper, Finance Director Department: Finance Subject: Establishment of a Municipal Grocery Sales Tax Background Information: In August 2024, the State of Illinois approved legislation which eliminates the Statewide Grocery Tax effective January 1, 2026. This 1 % tax is collected by the State and distributed to individual municipalities based on collections within each jurisdiction. For the Village of Brookfield, that amounts to approximately $50,000 on an annual basis. Prior to the legislation, the State levied and administered the collection of this tax. If the continuation of this revenue stream is approved by the Board, the Village will now be the administrator of the tax. The collection and disbursement will still continue through the State. The legislation eliminating the tax on the state level provided that non-home rule municipalities will have the ability to enact a local grocery sales tax, essentially maintaining the status quo in these communities. If the Ordinance is filed with the Illinois Department of Revenue by October 1, 2025, the tax will continue uninterrupted. After October 1, the next deadline for filing the Ordinance would be April 1,with the tax being implemented July 1, 2026. A quick survey of surrounding communities regarding the implementation of the tax is shown below: Page 13 of 28 Based on current year reductions in budgeted revenue sources, including the absence of a Cannabis Tax as well as a decrease in the Local Use Tax, it is important to help fund these revenue shortfalls, or at least not add to these reductions. By enacting this Ordinance, the Village will maintain its base sales tax revenues to fund operations. Financial Impact: A decrease of approximately $50,000 in annual sales tax receipts. Recommendation(s): Staff recommends approval of the Ordinance. Attachments: Draft Ordinance grocery tax faq iml letter and enacting munis for 6-27-2025 cow memo Page 14 of 28  ORDINANCE 2025 - AN ORDINANCE AMENDING THE PROVISIONS OF CHAPTER 50 ENTITLED “TAXATION” OF THE CODE OF ORDINANCES, VILLAGE OF BROOKFIELD, ILLINOIS, IMPOSING A MUNICIPAL GROCERY RETAILERS’ OCCUPATION TAX AND A MUNICIPAL GROCERY SERVICE OCCUPATION TAX PASSED AND APPROVED BY THE PRESIDENT AND BOARD OF TRUSTEES THE 14TH DAY OF JULY 2025 Published in pamphlet form by authority of the corporate authorities of the Village of Brookfield, Illinois, the 14th day of July 2025. Page 15 of 28  ORDINANCE 2025 - AN ORDINANCE AMENDING THE PROVISIONS OF CHAPTER 50 ENTITLED “TAXATION” OF THE CODE OF ORDINANCES, VILLAGE OF BROOKFIELD, ILLINOIS, IMPOSING A MUNICIPAL GROCERY RETAILERS’ OCCUPATION TAX AND A MUNICIPAL GROCERY SERVICE OCCUPATION TAX WHEREAS, the Village of Brookfield (the “Village”) is an Illinois unit of local government pursuant to the Constitution of the State of Illinois, as amended; WHEREAS, Section 1-2-1 of the Illinois Municipal Code, 65 ILCS 5/1-2-1, authorizes the corporate authorities of the Village to pass all ordinances and make all rules and regulations proper or necessary, to carry into effect the powers granted to the Village, with such fines or penalties as may be deemed proper; WHEREAS, the Municipal Grocery Occupation Tax Law, codified as Section 8- 11-24 of the Illinois Municipal Code, 65 ILCS 5/8-11-24, authorizes the corporate authorities of the Village to impose a tax, to be effective on or after January 1, 2026, upon all persons engaged in the business of selling groceries at retail in the Village at the rate of one percent (1%) of the gross receipts from the sales of the groceries (the “Municipal Grocery Retailers’ Occupation Tax”); WHEREAS, Section 8-11-24 of the Illinois Municipal Code, 65 ILCS 5/8-11-24, requires any municipality imposing a Municipal Grocery Retailers’ Occupation Tax to also impose a Service Occupation Tax at the same rate, upon all persons engaged, in the Village, in the business of making sales of service, who, as an incident to making those sales of service, transfer groceries as an incident to a sale of service (the “Municipal Grocery Service Occupation Tax”); WHEREAS, the Municipal Grocery Retailers’ Occupation Tax, the Municipal Grocery Service Occupation Tax, and all civil penalties that may be assessed as an 1 Page 16 of 28 incident of the taxes are to be administered, collected and enforced by the Illinois Department of Revenue; and WHEREAS, the Village Board of Trustees have determined that it is desirable, necessary and in the best interests of the Village and its residents that the Village amend the Code of Ordinances, Village of Brookfield, Illinois, to impose both a Municipal Grocery Retailers’ Occupation Tax and a Municipal Grocery Service Occupation Tax as permitted by Section 8-11-24 of the Illinois Municipal Code, 65 ILCS 5/8-11-24; NOW, THEREFORE, BE IT ORDAINED by the Board of Trustees of the Village of Brookfield, Cook County, Illinois, as follows: Section 1: Recitals. The facts and statements contained in the preamble to this Ordinance are found to be true and correct and are hereby adopted as part of this Ordinance. Section 2: Municipal Grocery Retailers’ Occupation Tax and Municipal Grocery Service Occupation Tax; Tax Imposed. A tax is hereby imposed upon all persons engaged in the business of selling groceries, as defined in the Municipal Grocery Occupation Tax Law, at retail in the Village of Brookfield at the rate of 1% of the gross receipts from such sales made in the course of such business while this Ordinance is in effect; and a tax is hereby imposed upon all persons engaged in the Village of Brookfield in the business of making sales of service, at the rate of 1% of the selling price of all groceries, as defined in the Municipal Grocery Occupation Tax Law, transferred by such serviceperson as an incident to a sale of service. 2 Page 17 of 28  The imposition of these taxes is in accordance with and subject to the provisions of the Municipal Grocery Occupation Tax Law (65 ILCS 5/8-11-24). Section 3: Illinois Department of Revenue to Administer. The taxes hereby imposed, and all civil penalties that may be assessed as an incident thereto, shall be collected and enforced by the Department of Revenue of the State of Illinois. The Department of Revenue shall have full power to administer and enforce the provisions of this Ordinance. Section 4: Codification of Municipal Grocery Retailers’ and Service Occupation Taxes. Chapter 50 Entitled “Taxation” of the Code of Ordinances, Village of Brookfield, Illinois, as amended, is hereby further amended by adding thereto Article XII entitled “Municipal Grocery Tax” to read as follows: ARTICLE XII - MUNICIPAL GROCERY TAX Sec. 50-600. - Municipal Grocery Retailers’ Occupation Tax and Municipal Grocery Service Occupation Tax; Tax Imposed. Effective January 1, 2026, a tax is hereby imposed upon all persons engaged in the business of selling groceries, as defined in the Municipal Grocery Occupation Tax Law, at retail in the Village of Brookfield at the rate of 1% of the gross receipts from such sales made in the course of such business while this Ordinance is in effect; and a tax is hereby imposed upon all persons engaged in the Village of Brookfield in the business of making sales of service, at the rate of 1% of the selling price of all groceries, as defined in the Municipal Grocery Occupation Tax Law, transferred by such serviceperson as an incident to a sale of service. The imposition of these taxes is in accordance with and subject to the provisions of the Municipal Grocery Occupation Tax Law (65 ILCS 5/8-11-24). Section 5: Filing of Ordinance. Once approved, the Village Clerk shall be and is hereby directed and authorized to certify a copy of this ordinance and to promptly 3 Page 18 of 28 file a certified copy of this ordinance with the Illinois Department of Revenue on or before October 1, 2025. Section 6: Repeal of conflicting provisions. All ordinances and resolutions, or parts thereof, in conflict with the provisions of this Ordinance are, to the extent of the conflict, expressly repealed on the effective date of this Ordinance. Section 7: Severability. If any provision of this ordinance, or the application of any provision of this ordinance, is held unconstitutional or otherwise invalid, such occurrence shall not affect other provisions of this ordinance, or their application, that can be given effect without the unconstitutional or invalid provision or its application. Each unconstitutional or invalid provision, or application of such provision, is severable, unless otherwise provided by this ordinance. [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK] 4 Page 19 of 28  Section 8: Effective Date. This Ordinance and the taxes imposed by this Ordinance shall take effect on January 1, 2026. ADOPTED this 14th day of July 2025, pursuant to a roll call vote as follows: AYES: ____________________________________ NAYS: ____________________________________ ABSENT: ____________________________________ ABSTENTION: ____________________________________ APPROVED by me this 14th day of July 2025. ___________________________________ Michael J. Garvey, President of the Village of Brookfield, Cook County, Illinois ATTESTED and filed in my office, this 14th day of July 2025. __________________________________ Michael G. Melendez, Clerk of the Village of Brookfield, Cook County, Illinois 5 Page 20 of 28  Locally Imposed Grocery Sales Tax BY I L L I N O I S M U N I C I PA L L E AG U E STA F F April 29, 2025 During the 2024 Spring Legislative Session, the Illinois Municipal For municipalities, both home rule and non-home rule, that League (IML) played an integral role in securing the authority for wish to implement a local grocery sales tax effective on both home rule and non-home rule municipalities to implement January 1, 2026, the first step is to pass an authorizing by ordinance a 1% locally imposed grocery sales tax (without ordinance. IML has developed a model ordinance that can be need for referendum approval) following the elimination of the adopted locally, which is available on our website.1 A certified statewide grocery tax effective January 1, 2026. copy of the ordinance must then be submitted to IDOR, postmarked by October 1, 2025, in order for the tax to be While IML’s preference was to maintain the status quo and for imposed beginning January 1, 2026. This will guarantee no the tax to remain statewide, Public Act 103-0781 repeals the lapse in revenues from this tax. statewide tax on groceries. However, the authority to implement a 1% grocery sales tax locally by ordinance was approved as part The ordinance must be sent to IDOR through MyLocalTax2 or via of the same legislation. USPS, FedEx or UPS (it may not be submitted by email) to: IML advocated for a delayed implementation date of the Aaron Allen, Division Manager statewide grocery tax repeal and the elimination of the Illinois Local Tax Allocation Division 3-500 Department of Revenue’s (IDOR) administrative fees to collect Illinois Department of Revenue and remit the tax, meaning municipalities will see no decrease 101 West Jefferson Street or lapse in grocery tax revenue, if timely in implementing the Springfield, IL 62702 tax locally. (217) 785-7116 IMPLEMENTATION TIMELINE If a municipality chooses to wait to implement a local 1% grocery tax at a later date, please keep in mind that ordinances • Now: Municipalities that wish to implement the local authorizing a local tax must be sent to IDOR and postmarked grocery tax effective on January 1, 2026, should adopt IML’s before April 1 for collection to begin on July 1, or postmarked model ordinance now to ensure timely filing with the Illinois after April 1 but before October 1, for collections to begin Department of Revenue. January 1 of the following year. • Prior to October 1, 2025: A certified copy of an ordinance authorizing the local implementation of a grocery If your municipality does not wish to impose the grocery tax sales tax must be submitted to IDOR, postmarked by locally after the statewide expiration, no action is required and October 1, 2025. the 1% grocery tax will be automatically repealed within your • January 1, 2026: The statewide grocery sales tax expires; jurisdiction on January 1, 2026. only locally imposed grocery sales taxes will remain. IML suggests you consult with your municipal attorney prior to considering the adoption of this model ordinance. More The statewide tax will not be repealed until January 1, 2026; resources are available at iml.org/grocerytax. until then, nothing will change and no action will be necessary by municipalities. However, for those municipalities that wish 1 https://www.iml.org/page. to implement the tax locally on day one, there are important cfm?category=5382 2 https://mytax.illinois.gov/MyLocal- benchmarks to consider. Tax/_/ Scan for Illinois Municipal League | 500 East Capitol Avenue, P.O. Box 5180 | Springfield, IL 62705-5180 | Phone 217.525.1220 | iml.org PDF Version ILLINOIS MUNICIPAL LEAGUE Page 21 of 28 Grocery Tax Illinois Public Act 103-0781 provides that the Illinois grocery tax of 1%, which is currently levied by the State and distributed to local governments, is scheduled to be eliminated effective January 1, 2026 and provides municipalities the authority to enact a replacement local sales tax on grocery items Frequently Asked Questions (FAQ) on Grocery Tax in Illinois 1. What is the grocery tax in Illinois? The grocery tax in Illinois refers to the 1% sales tax on groceries that has been in place since the 1990 sales tax reform. The 1990 reform eliminated state taxation on groceries but allowed for a 1% grocery tax distributed to local governments. It also standardized tax collection, preventing a patchwork of local grocery taxes administered independently by municipalities. The proceeds of the tax are distributed to local governments by the state. 2. When is the state grocery tax ending? The Illinois state grocery tax of 1% is set to be eliminated effective January 1, 2026, as per Public Act 103-0781, and provides municipalities the authority to enact a local sales tax on grocery items. 3. Will local governments impose their own grocery tax? As of February 2025, according to the Illinois Policy Institute, over 45 municipalities throughout the State have already passed an Ordinance to impose a local grocery tax to replace the state tax. Without this tax, local governments could face budget shortfalls. 4. Do municipalities currently have the authority to impose grocery taxes? Under current law, municipalities do not have the authority to impose grocery taxes unless granted by state legislation. The new law allows municipalities to establish their own grocery tax up to 1%, starting in 2026. 5. Will consumers see a difference in grocery prices due to the new local grocery tax? NO, consumers are already paying the 1% state grocery tax. The local tax is simply replacing the state tax. 6. How will the revenue from the grocery tax be used? The Village of Brookfield relies on the revenue from grocery taxes to help fund essential services such as police and fire departments, public works, and infrastructure projects. 7. What would happen if the Village of Brookfield chose not to implement a grocery tax? If the Village does not implement a grocery tax, it will lose approximately $50,000 annually. Page 22 of 28 8. How will the municipal grocery tax be collected? The Illinois Department of Revenue (IDOR) will administer and collect the municipal grocery sales tax on behalf of municipalities that enact it, ensuring a streamlined process for retailers. 9. How do municipalities enact a local grocery tax? To implement a grocery tax, municipalities must pass an ordinance and submit it to the state by October 1, 2025, to ensure it takes effect on January 1, 2026. Page 23 of 28  Illinois Municipalities That Have Adopted Ordinances Implementing the Local Grocery Sales Tax As of 5/15/2025 at 9:00 a.m. Disclaimer: This list of municipalities that have adopted a local grocery sales tax ordinance is based on information confirmed by the Illinois Department of Revenue (IDOR). It is not an official IDOR document and may be incomplete. Some municipalities are listed more than once due to their jurisdiction overlapping multiple counties. The Illinois Municipal League has compiled and posted this information as a resource and will update the list periodically as new information becomes available. Location Code Municipality County 1 014-0002-9 Albers Clinton 2 045-0052-0 Algonquin Kane 3 056-0003-0 Algonquin McHenry 4 091-0003-2 Anna Union 5 006-0033-4 Annawan Bureau 6 037-0004-6 Annawan Henry 7 021-0002-9 Arcola Douglas 8 011-0002-5 Assumption Christian 9 065-0002-1 Athens Menard 10 049-0042-1 Bannockburn Lake 11 075-0002-5 Barry Pike 12 022-0070-8 Batavia DuPage 13 045-0003-2 Batavia Kane 14 016-0007-9 Berwyn Cook 15 070-0004-9 Bethany Moultrie 16 016-0008-7 Blue Island Cook 17 016-0119-9 Bridgeview Cook 18 026-0005-6 Brownstown Fayette 19 016-0154-7 Buffalo Grove Cook 20 049-0043-1 Buffalo Grove Lake 21 056-0044-8 Bull Valley McHenry 22 059-0005-0 Bunker Hill Macoupin 23 016-0163-6 Burbank Cook 24 045-0005-9 Burlington Kane 25 039-0003-7 Campbell Hill Jackson 26 032-0011-6 Carbon Hill Grundy 27 039-0004-5 Carbondale Jackson 28 100-0059-3 Carbondale Williamson 29 059-0001-8 Carlinville Macoupin 30 014-0001-0 Carlyle Clinton 31 022-0053-8 Carol Stream DuPage 32 031-0001-4 Carrollton Greene 33 074-0004-7 Cerro Gordo Piatt 34 015-0001-5 Charleston Coles 35 053-0007-1 Chatsworth Livingston 36 038-0005-9 Chebanse Iroquois 37 046-0008-8 Chebanse Kankakee 1 of 28 Page 24  Location Code Municipality County 38 016-0011-7 Chicago Heights Cook 39 072-0004-8 Chillicothe Peoria 40 016-0013-3 Cicero Cook 41 038-0006-7 Cissna Park Iroquois 42 022-0006-6 Clarendon Hills DuPage 43 013-0003-2 Clay City Clay 44 020-0001-6 Clinton DeWitt 45 037-0026-7 Coal Valley Henry 46 081-0006-3 Coal Valley Rock Island 47 091-0005-9 Cobden Union 48 037-0007-0 Colona Henry 49 057-0007-8 Colfax McLean 50 068-0004-1 Coffeen Montgomery 51 079-0003-1 Coulterville Randolph 52 016-0118-0 Crestwood Cook 53 057-0011-6 Danvers McLean 54 092-0001-0 Danville Vermilion 55 071-0070-8 Davis Junction Ogle 56 058-0001-3 Decatur Macon 57 090-0004-6 Deer Creek Tazewell 58 102-0005-3 Deer Creek Woodford 59 016-0172-5 Deer Park Cook 60 049-0075-8 Deer Park Lake 61 006-0007-5 Depue Bureau 62 032-0013-2 Diamond Grundy 63 099-0065-9 Diamond Will 64 052-0001-6 Dixon Lee 65 022-0008-2 Downers Grove DuPage 66 016-0169-5 East Dundee Cook 67 045-0046-6 East Dundee Kane 68 090-0016-1 East Peoria Tazewell 69 057-0048-5 El Paso McLean 70 102-0006-1 El Paso Woodford 71 045-0008-3 Elburn Kane 72 043-0005-1 Elizabeth Jo Daviess 73 016-0140-7 Elk Grove Village Cook 74 022-0065-1 Elk Grove Village DuPage 75 016-0019-2 Evergreen Park Cook 76 096-0001-9 Fairfield Wayne 77 020-0004-0 Farmer City DeWitt 78 010-0008-1 Fisher Champaign 79 016-0099-0 Forest View Cook 80 053-0014-2 Forrest Livingston 81 058-0007-2 Forsyth Macon 82 037-0008-9 Galva Henry 83 019-0008-0 Genoa DeKalb 84 092-0013-4 Georgetown Vermilion 85 038-0013-1 Gilman Iroquois 2 of 28 Page 25  Location Code Municipality County 86 059-0009-3 Girard Macoupin 87 022-0011-2 Glen Ellyn DuPage 88 084-0043-1 Grandview Sangamon 89 049-0008-1 Grayslake Lake 90 018-0002-7 Greenup Cumberland 91 065-0005-6 Greenview Menard 92 049-0048-0 Hainesville Lake 93 083-0001-1 Harrisburg Saline 94 016-0124-5 Harwood Heights Cook 95 049-0082-0 Hawthorn Woods Lake 96 067-0005-5 Hecker Monroe 97 082-0083-1 Hecker St Clair 98 100-0012-7 Herrin Williamson 99 057-0015-9 Heyworth McLean 100 016-0030-3 Hickory Hills Cook 101 060-0015-0 Highland Madison 102 049-0012-1 Highwood Lake 103 068-0001-7 Hillsboro Montgomery 104 016-0152-0 Hoffman Estates Cook 105 045-0055-5 Hoffman Estates Kane 106 045-0053-9 Huntley Kane 107 056-0012-1 Huntley McHenry 108 084-0014-8 Illiopolis Sangamon 109 041-0006-9 Ina Jefferson 110 084-0044-1 Jerome Sangamon 111 100-0014-3 Johnston City Williamson 112 049-0080-4 Kildeer Lake 113 050-0009-2 La Salle La Salle 114 006-0010-5 Ladd Bureau 115 049-0017-0 Lake Zurich Lake 116 057-0018-3 Leroy McLean 117 057-0019-1 Lexington McLean 118 001-0012-9 Liberty Adams 119 016-0038-9 Lyons Cook 120 055-0001-1 Macomb McDonough 121 010-0017-9 Mahomet Champaign 122 056-0013-8 Marengo McHenry 123 016-0107-5 Markham Cook 124 084-0018-0 Mechanicsburg Sangamon 125 016-0041-9 Melrose Park Cook 126 050-0015-7 Mendota La Salle 127 069-0009-7 Meredosia Morgan 128 081-0013-6 Milan Rock Island 129 032-0007-8 Minooka Grundy 130 047-0023-6 Minooka Kendall 131 099-0062-4 Minooka Will 132 081-0014-4 Moline Rock Island 133 098-0001-8 Morrison Whiteside 3 of 28 Page 26  Location Code Municipality County 134 011-0009-2 Morrisonville Christian 135 045-0016-4 Montgomery Kane 136 047-0018-1 Montgomery Kendall 137 016-0043-5 Morton Grove Cook 138 008-0001-5 Mount Carroll Carroll 139 005-0001-1 Mount Sterling Brown 140 058-0011-0 Mount Zion Macon 141 082-0015-7 New Athens St Clair 142 080-0005-0 Noble Richland 143 068-0012-2 Nokomis Montgomery 144 057-0023-1 Normal McLean 145 016-0120-2 Norridge Cook 146 045-0018-0 North Aurora Kane 147 016-0049-4 Oak Lawn Cook 148 053-0018-5 Odell Livingston 149 061-0008-2 Odin Marion 150 010-0019-5 Ogden Champaign 151 080-0001-8 Olney Richland 152 016-0054-0 Palatine Cook 153 049-0099-5 Palatine Lake 154 049-0071-5 Park City Lake 155 072-0050-1 Pekin Peoria 156 090-0001-1 Pekin Tazewell 157 065-0001-3 Petersburg Menard 158 073-0001-8 Pinckneyville Perry 159 045-0019-9 Pingree Grove Kane 160 075-0001-7 Pittsfield Pike 161 100-0015-1 Pittsburg Williamson 162 053-0001-0 Pontiac Livingston 163 006-0001-6 Princeton Bureau 164 026-0012-9 Ramsey Fayette 165 081-0016-0 Rapids City Rock Island 166 068-0015-7 Raymond Montgomery 167 079-0013-9 Red Bud Randolph 168 016-0058-3 Richton Park Cook 169 016-0075-3 River Forest Cook 170 084-00229 Riverton Sangamon 171 027-0011-5 Roberts Ford 172 098-0013-1 Rock Falls Whiteside 173 081-0001-2 Rock Island Rock Island 174 028-0014-4 Royalton Franklin 175 054-0017-1 San Jose Logan 176 063-0009-1 San Jose Mason 177 061-0010-4 Sandoval Marion 178 016-0116-4 Schaumburg Cook 179 022-0066-1 Schaumburg DuPage 180 032-0027-2 Seneca Grundy 181 050-0022-1 Seneca La Salle 4 of 28 Page 27  Location Code Municipality County 182 028-0015-2 Sesser Franklin 183 019-0014-5 Shabbona DeKalb 184 050-0024-6 Sheridan La Salle 185 084-0024-5 Sherman Sangamon 186 082-0027-0 Shiloh St Clair 187 082-0018-1 Smithton St Clair 188 016-0160-1 South Barrington Cook 189 045-0023-7 South Elgin Kane 190 084-0046-6 Southern View Sangamon 191 056-0018-9 Spring Grove McHenry 192 006-0021-0 Spring Valley Bureau 193 043-0012-2 Stockton Jo Daviess 194 045-0024-5 Sugar Grove Kane 195 010-0030-6 Thomasboro Champaign 196 092-0030-4 Tilton Vermilion 197 090-0014-3 Tremont Tazewell 198 014-0016-9 Trenton Clinton 199 093-5000-7 Wabash County Wabash 200 028-0021-7 West City Franklin 201 028-0018-7 West Frankfort Franklin 202 022-0025-2 Westmont DuPage 203 022-0001-5 Wheaton DuPage 204 016-0070-2 Wheeling Cook 205 049-0090-1 Wheeling Lake 206 048-0021-4 Williamsfield Knox 207 084-0026-1 Williamsville Sangamon 208 099-0021-7 Wilmington Will 209 068-0020-3 Witt Montgomery 210 056-0022-7 Wonder Lake McHenry 211 069-0016-1 Woodson Morgan 212 047-0001-5 Yorkville Kendall 5 of 28 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