OREGON – The Oregon City Council has tabled proposed legislation establishing a Municipal Grocery Retailers’ Occupation Tax and a Municipal Grocery Service Occupation Tax, both set to take effect on January 1, 2026. Under the new law, grocery retailers in the city would be required to pay a 1% tax on gross receipts from their sales, while businesses offering services that also transfer groceries will be subject to the same tax rate.
City Manager Darin DeHaan said this will replace the exact same tax that was recently dropped by the state.
“ The state of Illinois decided to remove the grocery tax, but also built in the ability without going to referendum for local municipalities to add their own grocery tax. The state will still collect the money. There’ll be an administrative fee on it, and then that will still come into the city coffers,” he said. “Our estimates, if we don’t replace the grocery taxes, we would lose between 40 and $50,000 annually.”
Mayor Ken Williams said they would look into this further at a future meeting.