WOOD RIVER – The Wood River City Council narrowly approved an ordinance on Monday replacing the state’s expired 1% sales tax on groceries with the city’s own 1% taxes on groceries and grocery “services.”
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According to the ordinance, the State of Illinois recently eliminated its 1% sales tax on grocery items; 100% of the revenue generated by this tax went to local municipalities. Without this sales tax revenue, Wood River estimates an annual loss of $800,000, which “creates an undue hardship on [the] City.”
To help local municipalities make up for the lost revenue, the Illinois General Assembly later passed a law allowing each municipality to put their own 1% grocery sales taxes in place. However, any municipality that imposes their own grocery sales tax is also required to impose a “service tax” at the same rate; Wood River’s 1% sales tax would be implemented alongside a 1% “service tax.”
“[The] City has determined it is in the best interests of public health, safety, general welfare and economic welfare to levy the Grocery Tax and the Service Tax of 1% to provide services for City residents and to fund the City government,” the ordinance states.
Council members voted 3-2 to pass the grocery tax ordinance, with Councilmen Bill Dettmers and Jeremy Plank casting the two votes against the ordinance.
Last month, members of the Jerseyville City Council discussed passing a similar ordinance in Jerseyville, where sales taxes account for nearly 60% of the city’s revenue. The retention of this 1% grocery tax would need to be certified by the City Council no later than Oct. 1, 2025 for the city to start collecting the tax on Jan. 1, 2026.
