Elburn mulls tax on prepared food and beverages at restaurants, grocery stores

The village of Elburn plans to add 1% to the tax on prepared food and beverages, whether from a restaurant, a grocery store or other businesses that sell prepared food.

Village Administrator John Nevenhoven brought the recommendation to the Village Board on Sept. 5 after learning that other municipalities such as Pingree Grove, Glencoe, Homewood, Roselle, Westmont and Yorkville have all implemented such a tax, referred to as a “places for eating” tax.

He said Pingree Grove’s tax is at 2%, but the others are at 1%.

“This would not be directed toward property owners, but toward people who are out eating and drinking,” Nevenhoven said. “We’re looking at [the consumer paying] $1 on a $100 meal.”

While it shouldn’t be a hardship on the customer, the revenue the municipality could accrue could be substantial, he said. Pingree Grove, for example, was bringing in about $180,000 to $200,000 a year. The tax is locally administered, meaning revenue would be kept at the local level.

Nevenhoven recommended the village identify a specific project or area the money would be used for. Similar to the additional 1% general sales tax the village implemented a few years ago, which goes toward maintaining streets and parks, this revenue could be dedicated to a new municipal building.

Trustee Pat Schuberg wondered how the tax would impact businesses such as Jewel-Osco and Ream’s Meat Market that sell both groceries and prepared meals.

“How onerous would this be for businesses to separate out these things?” she asked.

Nevenhoven said it likely would be a small administrative cost up front.

Elburn Village President Jeff Walter said it could be a good way to bring in additional income as a way to help pay for the police station that would not impact property owners.

“It sounds like a reasonable thing to do,” Schuberg said.

Nevenhoven said there would be time from the announcement to the implementation to give the village time to notify the businesses.