Princeton looks to keep 1% sales tax on groceries

Princeton intends to keep a 1% sales tax on groceries in place after the state passed legislation that would eliminate the tax in 2026.

The Princeton City Council passed Monday the first reading of an ordinance to maintain the tax. A final reading will be voted on in an upcoming council meeting.

City Manager Theresa Wittenauer said while it is challenging to figure out how much Princeton would stand to lose in funds if it were to allow the 1% sales tax on groceries to be repealed, the Illinois Municipal League completed a comparative study with similar sized communities and figured the loss for cities like Princeton would be about $350,000 to $400,000 annually.

Wittenauer said collecting revenue from sales tax allows the city to benefit from people who live outside of Princeton, not just property owners. At a meeting earlier this month, Wittenauer credited sales tax revenue with keeping the property tax rate down. She said the city also may see a jump in sales tax with the construction of an Aldi grocery store in the works.

“This is not a new tax,” Wittenauer said.

Communities have a deadline of Oct. 1 to pass an ordinance if they wish to keep the 1% sales tax on groceries in place.

Mayor Ray Mabry said it is prudent for the city to maintain the sales tax.

At the time of the state’s repeal of the tax, Illinois was one of 13 states that collects a sales tax on groceries. Gov. JB Pritzker said he believes the tax is regressive and hurts low-income Illinoisans. The measure also intended to lift the burden of inflation for consumers, the governor’s office said at the time of the repeal.

With a number of communities concerned about a loss in local revenue, the Illinois Municipal League said it played a role in allowing communities to maintain the sales tax and delaying implementation of the repeal for communities to figure out how they want to move forward.