As state grocery tax ends, Yorkville considers its own

With the incoming Costco expected to be a huge stimulus for Yorkville’s coffers, the city has until October to authorize a local sales tax after the elimination of the state’s grocery sales tax collection and dispersal system, set to take effect on Jan. 1, 2026.

City administrator Bart Olson said the Costco grocery store warehouse is estimated to generate more than $1 million in sales taxes annually. The city already collects about $300,000 in sales taxes, which it incorporates into its annual budgets.

“If we do reimplement it, it will not change anybody’s tax rate effectively,” Olson said at a City Council meeting. “It generates a fair amount of revenue for us within our budget. It’s a one-to-one replacement. It basically gives us the local authority to do so for our budget.”

Olson said reauthorization of the sales tax is a great way to provide stimulus to the city’s budget without making a large dent in the wallets of the town’s residents.

“Obviously Costco draws in more people from outside of the community than inside, at least compared to other grocery stores,” Olson said.

Until October, city officials will explore the options of reauthorizing the sales tax at the current rate, or authorizing a decrease in the rate.

“The projection is that you will reauthorize, and if you decide not to, we would have to scramble to make that work within the budget,” Olson said. “It would also then delay Costco’s payments, which will have some impacts on the budgets.”