Citing rising costs, Glencoe will add local sales tax and expand food/beverage tax

With the hope of addressing what officials described as “continued cost escalation in nearly all areas of village operations,” Glencoe trustees signed off on measures that will bolster the town’s revenue via expanded tax programs.

Village trustees during their Thursday, Nov. 20 meeting unanimously approved an ordinance adopting a new 1% home rule sales tax and building upon its dining-out tax. The sales tax is slated to go into effect next summer, while the change to the food and beverage tax will begin on Jan. 1.

The board’s approval marks the second time in a year since earning home-rule status that Glencoe authorized imposing a new tax.

Nikki Larson, Glencoe’s deputy village manager and chief financial officer, told the board that village staff, as part of the budgeting process, identified rising costs across “many areas of our operation, which led us to investigate alternative sources of revenue.”

Those increased costs, per Larson, are driven by inflation, including the cost of labor and materials, and supply-chain issues. The cost increases, along with state-mandated pension costs, intensified the strain on Glencoe’s primary revenue sources, according to a village memo.

As previously reported by The Record, a November 2024 referendum saw more than 60% of Glencoe voters support the village becoming a home-rule municipality. Glencoe’s home-rule status took effect as of the start of 2025.

Prior to the passage of the referendum, the Village of Glencoe was not a home-rule unit and needed to abide by all mandates from state and county government.

Home-rule status generally allows municipalities greater flexibility to govern locally while also not being tied to all state-imposed regulations and mandates.

The status also offers Glencoe access to “new financial tools to strengthen fiscal sustainability while keeping property tax increases within self-imposed limits,” officials said in a village memo. One of those tools is the now-approved home-rule sales tax.

“Home-rule sales tax was an attractive option for us as it applies to not only residents but nonresidents who are visiting town, whether they are working here or just visiting for the day, which also helps us diversify our revenue source and shift the need for the village to tap into the property tax levy,” Larson told the board during the Nov. 20 meeting.

Glencoe’s new tax will go into effect July 1, 2026, and will be imposed on general merchandise sold within the village; though, exceptions exist.

Personal property that requires a title or needs to be registered by a state agency is exempt. Such items would include, but are not limited to, cars, boats and trailers. Additionally, food, drugs and medical appliances are not included in the tax, per Larson.

Village staff are expecting the tax to annually generate approximately $500,000, depending on the sales activity in town, Larson said.

According to village documents, the Illinois Department of Revenue will administer the tax on behalf of the village. That includes collection, enforcement and remittance.

Village President Howard Roin during short remarks spoke to the importance of Glencoe maintaining fund balances. Roin cited this year’s significant delay from Cook County in collecting property taxes as an example why it was necessary to have such balances to fund imperative village operations.

Roin also echoed Larson’s point about this tax not solely falling on Glencoe residents.

“Sales taxes are an example of a tax that Glencoe residents may pay but also people who are not Glencoe residents may pay it and that is something we want to be moving toward,” he said.

In May of this year, Glencoe officials approved the adoption of a 1% local grocery tax that will replace the soon-to-expire state of Illinois tax. That decision, officials said at the time, would help the village continue funding essential services without increasing the property-tax burden on residents.

Officials previously estimated the loss of the state grocery, if not replaced by a local tax, would cost the village $250,000 annually.

Food and beverage tax replaces places for eating tax

Glencoe officials during the meeting also approved an ordinance repealing the village’s current places for eating tax and replacing it with a food and beverage tax.

The new tax, per officials, will still apply to meals and drinks from restaurants in Glencoe but will now also include prepared foods from grocery or convenience stores and packaged beer, wine and liquor.

The home-rule food and beverage tax will carry the same 1% rate at the previously existing places for eating tax.

Glencoe in January of 2021 implemented the places for eating tax. Since that point, per a village memo, revenues have “provided a modest but stable source of revenue that has helped offset operational and capital costs.”

But officials this year have said that increased operating costs and market volatility have placed new stressors on the village’s financial outlook.

“The proposed transition to a home rule food and beverage tax provides a strategic opportunity to address these fiscal challenges within the framework of the Village’s new home rule authority,” a village memo reads.

The food and beverage tax will be implemented on all sales as of Jan. 1, 2026.

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