The Johnsburg Village Board has tabled a vote on whether to increase its sales tax by up to a half-percent, hoping to determine if it can limit where that tax is charged.

The board is eyeing a special meeting Sept. 30 to get a vote on the books before the end of the month.

On Tuesday, the board asked Village Attorney Michael Smoron to look into what is needed to create a business district for the Route 31 corridor, and if a higher sales tax could only be charged there.

Until last year, Illinois law required non-home-rule communities to get voters’ approval to increase their sales tax. Johnsburg last put such a referendum on the ballot in 2016, when voters approved a half-cent local sales tax, which has raised about $600,000 a year in additional revenue for road resurfacing and other capital projects.

But the Illinois General Assembly in 2024 approved a measure allowing municipalities to raise their sales tax rate by up to 1%, in quarter-percent increments, without voter approval.

If Johnsburg were to increase its sales tax by a quarter percent, that would bring the total sales tax paid by shoppers in the village to 8%. Currently, Johnsburg only receives a 0.5% of the overall tax, now at 7.75%: The state gets 6.25%, while 0.25% goes to the McHenry County Mental Health Board and 0.75% to the RTA.

Increasing the local portion to 0.75% and possibly bring another $600,000 in revenue to the village.

There is no deadline by which municipalities must approve a sales tax increase, Smoron said. However, if approved by Sept. 30, the village could begin charging the additional tax on Jan. 1. The next deadline would be April 1 of next year for a July 1 implementation.

“They need time to implement this” at the Illinois Department of Revenue, Smoron said.

What Johnsburg does not have is a list of what the additional funding could be used for.

“I feel like we are being asked to act on something without having a lot of information to go along with it,” Trustee Joshua Hagen said. “What, specifically, do we want to do [with the extra revenue]?”

He added he wants to be able to tell residents where the money would be spent.

Much of any additional revenue would come from the Johnsburg Walmart store. Village officials also estimate that 80% of the tax bill would be paid by those who live outside the village but shop at the store, which sits on its border with McHenry.

In his research before the meeting, Hagen said he found that Fox Lake charges different tax rates depending on the area of town due to its special tax districts.

That village has two Business Development Districts, according to the Fox Lake Economic Development website. A 1% sales tax within the district is reimbursed to businesses for expansion, exterior façade improvements, and interior buildouts.

Trustee Keith Von Allmen asked if a Route 31 district could charge the tax only in that area, but if funds generated could be used in other parts of the village.

That may be the rub, Smoron said. A special taxing district law may require legal notices and public hearings first, and the funds may need to be spent within the district only.

That’s similar to what Crystal Lake did at its new Water’s Edge development, setting up a special 1% sales tax that will be applied to general merchandise sold there. The developer will be able to seek reimbursements from the sales tax revenue for certain expenses.

“It may be like a [tax increment financing] district, that there are boundaries,” Smoron said. He also promised to find out how long it takes to create a special tax district, noting the idea first came up during Tuesday’s meeting.