Ottawa approves new sales and service tax for next year in response to sunsetting grocery tax

The Ottawa City Council approved on Tuesday a new 1% sales tax and service tax for the city.

The approval comes after Gov. JB Pritzker’s decision to eliminate the grocery tax next year.

Under this change, Ottawa and other towns in Illinois were granted the authority to either reapply to maintain the grocery tax, impose a general sales tax or apply a 1% tax on both retailers’ and service occupations.

Ottawa Mayor Robb Hasty said the 1% sales tax will essentially be a replacement for the revenue lost from the grocery tax repeal.

“We agree with the governor’s decision that everyone needs to eat, so we are in favor of not taxing groceries, medicine or medical equipment,” Hasty said during the meeting. “However, in order to recoup the funds the city would have received, we decided to implement a 1% sales tax. This will help us recover the lost revenue and provide additional funds for future projects.”

The new tax will start in January, and it’s expected to help the city cover the gap left by the grocery tax while funding other future projects in Ottawa.