Two Counties, Two Rates — and a New Decision on Groceries

Barrington’s sales tax depends on which side of the village you shop. The Cook County portion carries a higher general retail rate than the Lake County side, a long-standing quirk that now intersects with a statewide change: Illinois will repeal its 1% state grocery tax in 2026 and hand new taxing authority to local governments. That puts Barrington’s leaders on the clock to decide whether to adopt a local grocery tax — or let the rate drop — with consumer prices and village revenues in the balance, according to Thomson Reuters and Porte Brown.

What the Numbers Say

On general retail sales, the total rate is higher in Cook County and lower in Lake County, and each side includes different components, the village’s sales-tax summary provided for this assignment shows. Retailers collect these taxes and remit them to the Illinois Department of Revenue, according to the village’s sales-tax summary provided for this assignment.

  • Cook County portion of Barrington (effective July 1, 2023): total rate 10% — 6.25% state, 1.75% county, 1% RTA, 1% Village home rule. Special rates: automobiles 7.25% (home rule does not apply); groceries and drugs 2.25% (the summary notes no state, county or home-rule component).

  • Lake County portion of Barrington (effective July 1, 2023): total rate 8% — 6.25% state, 0.75% RTA, 1% Village home rule. Special rates: automobiles 7% (home rule does not apply); groceries and drugs 1.75% (the summary notes no state, county or home-rule component).

Across both county areas, the Village of Barrington receives a combined two percentage points from the sales tax — 1% from the State’s share and 1% from the Village’s home rule sales tax, according to the village’s sales-tax summary provided for this assignment.

The State Shift on Grocery Taxes

Illinois has enacted a repeal of the 1% state sales and use tax on grocery items effective January 1, 2026. At the same time, municipalities and counties are authorized to adopt their own grocery tax of up to 1% if they pass an ordinance by October 1, 2025, according to Thomson Reuters and Porte Brown.

For Barrington, that means a clear policy choice. If the Village enacts a local grocery tax, consumer prices could remain closer to current levels on grocery items after the state repeal takes effect; if it declines to do so, the grocery tax burden in town would likely fall from today’s rates, which sit at 2.25% in the Cook County portion and 1.75% in the Lake County portion, the village’s sales-tax summary provided for this assignment shows. The path the Village chooses must be decided on a timeline that aligns with the October 1, 2025 ordinance deadline, as noted by Thomson Reuters and Porte Brown.

Why It Matters

Barrington is small in population but outsized in economic activity. The village counted 10,722 residents in the 2020 census, according to Wikipedia. It functions as a local employment and retail hub, home to roughly 1,000 businesses, major employers such as Motor Werks of Barrington and Wickstrom Auto Group, about 3.5 million square feet of office and industrial space, and 1.8 million square feet of retail and restaurant space, producing a daytime workforce of more than 13,400 employees, according to Village of Barrington.

Sales-tax policy resonates here in part because automotive-related transactions have historically driven a large share of municipal receipts. In 2008, auto sales, gasoline sales and state-taxable auto repairs generated about $2.1 million — roughly 56% of the village’s sales-tax income — underscoring Barrington’s exposure to sector swings, according to Wikipedia. With automobiles taxed at special rates on both sides of town and grocery items carrying distinct rates in Cook and Lake counties, even incremental changes can shift where residents shop and how much revenue the Village receives.

The forthcoming end of the state grocery tax amplifies that dynamic. Because Barrington straddles two counties with different general rates, a Village-level decision to adopt — or forgo — a local grocery tax could produce different price signals across the same community. That raises practical considerations about cross-border shopping within Barrington’s own boundaries and the importance of clear communication to residents and businesses, as the timing and local-option framework described by Thomson Reuters and Porte Brown make clear.

Next Steps for the Village

Village leaders face a series of practical choices as the 2026 deadline approaches. Several steps align with the legal timeline and the complexity of a municipality that spans two counties:

  • Model revenue outcomes across scenarios — no local grocery tax, a partial rate, or the full 1% allowed — and estimate effects on consumer prices in the Cook and Lake county portions of the village. The ordinance decision must be made by October 1, 2025, according to Thomson Reuters and Porte Brown.

  • Coordinate with Cook and Lake county counterparts to limit confusion and reduce incentives for intra-village cross-border shopping once the state repeal takes effect, per the framework outlined by Thomson Reuters.

  • Engage retailers, residents, and community organizations to weigh revenue stability against household costs, with attention to Barrington’s reliance on automotive sales and its role as a regional shopping destination, as reflected by Wikipedia and Village of Barrington.

Practical Guidance for Businesses

Local retailers — especially grocers and multi-location operators — will need to prepare for rate changes and potential divergence across the village’s county line. Advisers at Porte Brown note several upcoming shifts that call for planning:

  • Update point-of-sale and accounting systems to handle county-specific rates and any local grocery-tax adoption before January 1, 2026.
  • Prepare customer communications for receipt-level tax changes on grocery items, contingent on Village action.
  • If operating short-term rentals, plan for the expansion of the hotel operators’ occupation tax to include short-term stays starting July 1, 2025, per Porte Brown.
  • Remote sellers should reassess economic nexus and registration obligations as Illinois simplifies its threshold rules, according to Porte Brown.

The Stakes for Residents and the Budget

For households, the question is straightforward: what will they pay at the register for groceries after January 1, 2026? For the Village, the calculus includes maintaining core services and balancing a tax base that, historically, has leaned heavily on car sales, according to Wikipedia. The village’s sales-tax structure — with a two-percentage-point share flowing to the municipal budget — ties local revenue closely to retail activity, the village’s sales-tax summary provided for this assignment shows.

Barrington’s economic profile suggests the community can navigate the transition with careful planning. A sizable business footprint and daytime workforce, as described by Village of Barrington, provide breadth beyond its residential base. But the two-county map and the approaching ordinance deadline mean decisions must be made clearly and communicated early, as outlined by Thomson Reuters and Porte Brown.

Whether Barrington adopts a local grocery tax or not, the village’s choice will signal its priorities: affordability for residents, clarity for businesses, and stability for municipal finances. In a town where a county boundary can change the sales-tax line on your receipt, the coming year will determine how seamless that line feels for shoppers and how steady it is for City Hall.