At the Sept. 9 meeting, the Homewood Village Board agreed to implement the new 1% non-home rule local sales tax. The move will raise Homewood’s current 9% sales tax to 10%, and will go into effect on Jan. 1, 2026.
Information on the new sales tax was presented and discussed with the board at the Aug. 26 meeting.
Amy Zukowski, Homewood finance director, had said that the 1% tax is a new option available to non-home rule municipalities. In August 2024, Gov. J.B. Pritzker signed legislation allowing non-home rule communities to collect a 1% sales without getting approval from voters. She told trustees at the Aug. 26 meeting that Homewood, with a population of 18,789, doesn’t meet the 25,000 threshold for home rule status, so options to raise revenue are limited.
This tax will be implemented as a municipal retailers’ occupation tax and municipal service occupation tax. The tax will not be applied to the purchase of cars and trucks, nor prepared food and groceries, Zukowski said.
Homewood’s current operating budget is $27.7 million, which goes towards funding staff and services, purchases and repairs, Zukowski said.
The establishment of the 1% local sales tax would generate an estimated $3.5 million to help fund the village’s capital needs. This includes funding projects, such as the lead service line replacement project, which is mandated by the state and is estimated to cost $70 million. The additional revenue would also go towards road and infrastructure improvements, as well as pensions, she said.
Village Manager Napoleon Haney stressed that, according to survey results from Retail Coach, most of the shoppers who will pay the new tax are non-residents. For instance, non-resident shoppers made up 88% of sales on Halsted, while resident shoppers accounted for only 12%, she said.
“This allows us to get a return on our investment from non-Homewood residents,” Trustee Patrick Siemsen said.
According to the staff’s presentation, most other nearby municipalities have a sales tax rate of 10%.
“I think the competitiveness with the other towns stands out, we’re not doing anything that’s not an equal basis with most of the surrounding towns,” Mayor Rich Hofeld said.
Contrary to the support by the board, Craig Frank, co-owner of The Rock Shop in downtown Homewood, expressed his concern on the impact he thinks this will have on small businesses.
“I think this is a death knell for the small businesses. I think that the Targets and the Walmarts and the big box retailers are going to be able to absorb this,” Frank said, adding, “and I understand how sales tax works, it’s going to cost us business.”
“From the conversations that we’ve had with business owners, small business owners in Flossmoor, the 1% did not affect their business at all,” Trustee Lauren Roman said.
“I have a hard time imagining that one person will make a purchasing decision based upon 1% sales tax,” Trustee Jay Heiferman said, adding, “for a local resident to make a decision that they’re going to go out of town to buy, whatever they’re buying, based on a 1% – I have a hard time thinking that that will happen, so therefore I support it.”
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