Flossmoor village officials are considering a 2.5% “places for eating” tax as part of ongoing efforts to generate new non-property tax revenue.
The proposal was discussed at the April 6 Village Board meeting, where staff presented the tax as one of the few remaining options available to help offset rising costs that outpace property tax growth.
Assistant Village Manager Jonathan Bogue said the tax has been revisited multiple times, including during recent financial planning discussions.
“This is one of the two largest non-property tax revenue sources remaining to the village,” Bogue said.
The tax would apply to businesses that sell prepared food and beverages for immediate consumption with seating provided, including outdoor dining.
If implemented, the tax would be levied on gross receipts from food and beverage sales. While imposed on businesses, it is typically passed along to customers as a separate charge on restaurant bills.
Using data from the Illinois Department of Revenue, village staff estimated the 2.5% tax could generate approximately $437,500 annually.
Staff recommended a rate between 2.5% and 3%, which includes an additional amount to help cover administrative costs associated with managing the program.
Officials said the tax is common in surrounding communities and it would allow the village to capture revenue from non-residents who dine in Flossmoor. Homewood, for example, currently imposes a 2% places for eating tax.
According to the village memo, the financial impact on diners would be relatively small, adding about $2.50 to a $100 meal at the 2.5% rate.
If adopted, the tax would be administered by the village’s Finance Department. Businesses would be required to register, calculate the amount owed and submit monthly payments. Staff estimate the process would require about 22.5 hours of work per month, depending on reporting accuracy and timeliness.
Village Manager Bridget Wachtel acknowledged during the discussion that the proposal may not be popular but said it is part of a broader effort to address financial pressures.
The Village Board did not take final action and is expected to provide direction on whether to move forward and at what rate. Any next step would involve drafting an ordinance for future consideration.
