Arlington Heights Village Board Votes to Continue 1% Grocery Tax; Add New 5% Entertainment Streaming Tax

Village of Arlington Heights residents and visitors will face a continued 1% grocery tax effective after January 1, 2026 that will replace an expiring State of Illinois 1% grocery tax, and Arlington Heights residents will face a new Internet streaming tax, according to two voting sessions of the Arlington Heights Village Board Monday night, August 18, 2025. A third voting session connected to the grocery tax vote to expire and re-evaluate the grocery tax in two years was rejected by a vote of the village board.

The 1% local grocery tax imposed by the State of Illinois, which is due to expire statewide at the end of 2025, will be replaced by a Village of Arlington Heights local tax of 1%. The replacement of the Illinois grocery tax with the Arlington Heights local grocery tax will not increase taxes on groceries in 2026 in Arlington Heights. Over 40 municipalities in Illinois have decided to replace the Illinois 1% grocery tax. Most states in the United States do no have a state sales tax on groceries, but local taxes may exist. Municipalities must vote by October 1, 2025 to retain or continue to impose a grocery tax on residents and visitors.

Trustee Wendy Dunnington motioned to add a sunset clause to the grocery tax so the grocery tax could expire and be re-evaluated in two years. The motion was seconded by Greg Zyck. Mayor Jim Tinaglia explained that a separate amendment could be raised at any time in the future to re-evaluate the local grocery tax — saying “the flexibility is endless.”

Vote Monday night in Arlington Heights with a village board vote of 5-4 in opposition (“no”) to a sunset clause to expire and re-evaluate the 1% grocery tax in two years …

Village Board Members
Seated from Left to Right
(for audience facing board)

Trustee Thomas F. Schwingbeck Jr – No
(President Pro Tem)

Trustee Carina Santa Maria – Yes

Trustee Wendy Dunnington – Yes
(Made motion)

Trustee James J. Bertucci – No

Mayor Jim Tinaglia – No

Trustee Robin LaBedz – No

Trustee Scott Shirley – No

Trustee Bill Manganaro – Yes

Trustee Greg Zyck – Yes
(Seconded motion)

Vote Monday night in Arlington Heights with a village board vote of 6-3 in favor of retaining a 1% grocery tax when the State of Illinois grocery tax expires in 2026 …

Village Board Members
Seated from Left to Right
(for audience facing board)

Trustee Thomas F. Schwingbeck Jr – Yes
(President Pro Tem)

Trustee Carina Santa Maria – No

Trustee Wendy Dunnington – No

Trustee James J. Bertucci – Yes
(Motion made)

Mayor Jim Tinaglia – Yes

Trustee Robin LaBedz – Yes

Trustee Scott Shirley – Yes
(Seconded motion)

Trustee Bill Manganaro – No

Trustee Greg Zyck – Yes

The new 5% tax on streaming entertainment subscriptions purchased by homeowners will apply to pay the personnel costs of six new paramedics who will staff a fifth fire department ambulance 365 days per year, according to the Village of Arlington Heights. Currently, the fifth ambulance does not operate every day. Estimated costs revealed that residents who subscribe to all of the popular streaming services (e.g., Netflix, Prime Video, Disney Plus, Peacock, Hulu and YouTube TV) with commercials would face a new tax cost of about $41 per year. Residents subscribing to the same entertainment streaming services without commercials, would face a new tax cost of about $61, according to the Village of Arlington Heights.

Vote Monday night in Arlington Heights with a village board vote of 7-2 in favor of adding a new streaming tax on entertainment services via the Internet …

Village Board Members
Seated from Left to Right
(for audience facing board)

Trustee Thomas F. Schwingbeck Jr – Yes
(President Pro Tem)/(Motion made)

Trustee Carina Santa Maria – Yes

Trustee Wendy Dunnington – Yes

Trustee James J. Bertucci – Yes

Mayor Jim Tinaglia – Yes

Trustee Robin LaBedz – Yes
(Motion seconded)

Trustee Scott Shirley – Yes

Trustee Bill Manganaro – No

Trustee Greg Zyck – No

Village officials stated that without the two taxes or without a decrease in village services, Arlington Heights property owners would possibly face an increase property tax levy of 8.25%; or a reduction in village services.

Supporters say the tax will help replace cable franchise fees and telecommunications taxes that have been declining due to cord cutting.

“I look at both of these taxes as taxes that are being retained because they’re just being packaged differently,” said Trustee Jim Bertucci. “(The streaming tax) is just shifting from one technology to another newer technology.”

Trustee Bill Manganaro, who voted against both taxes, suggested the village dip into its reserve fund, amid the financial pressures residents face from the higher price of groceries, electricity, insurance and other costs.

Streaming taxes are in place in Bloomington, Chicago, East Dundee and Evanston, but are not yet common across the region.

The new tax could show up on Arlington Heights residents’ streaming service bills early next year.

Officials expect to collect $480,000 a year, helping cover a portion of the expected $1.12 million ambulance staffing costs. They also plan to recapture $175,000 in ambulance fees from reduced mutual aid provided by neighboring towns.

But officials also have left open the door to a modest property tax levy increase next year to fully fund the new ambulance, which they argue is needed due to increased call volumes. For now, the new ambulance that hit the streets this year is being staffed by existing fire department personnel on overtime.

Meanwhile, keeping the grocery tax will preserve $1.3 million a year for village coffers, thereby avoiding service reductions and large property tax hikes, supporters contend.

But opponents argued the village should have considered other revenue sources to fill the gap.

“It’s a bad tax, and tonight is our opportunity to eliminate a tax that hurts the most vulnerable people in our community,” said Trustee Wendy Dunnington, who suggested the village raise its overall home rule sales tax instead.

About 370 of the nearly 1,300 municipalities in Illinois have opted to keep the grocery tax in place.

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