Fox River Grove adds sales tax, plans to lower other fees and taxes

Fox River Grove will add a 1% sales tax starting next year, with officials planning to reduce other taxes and fees for residents to offset the new tax.

Board trustees agreed in a 5-1 vote Tuesday to enact a 1% non-home-rule sales tax, with Trustee David Joseph being the sole no vote.

At the same meeting, trustees also unanimously approved substantial cuts to a telecommunications tax imposed on residents and businesses.

The simplified municipal telecommunications tax will drop from 6% to 1% starting Jan. 1. The reduction is estimated to save residents and businesses a total of $45,000 per year, according to village documents.

The telecommunications tax is found on customer bills for calls and texts on mobile devices, landline telephones, paging services and two-way radios, but not on data plans or prepaid wireless services, according to a village news release.

The new sales tax will go into effect on Jan. 1. It does not apply to groceries, prescription drugs, certain medical devices or vehicles, according to village documents.

Neighboring communities are also implementing the sales tax, including Cary, whose was approved by trustees last month.

The idea is that adding a sales tax – that is applied to anyone shopping in Fox River Grove – can lessen the burden for taxes that apply exclusively to residents and businesses within the village. Reducing the telecommunications tax is the “first of several tax and fee reductions planned for residents and businesses,” according to village documents.

Other fees and taxes that could be reduced in the future include electricity surcharges, natural gas surcharges and cable television franchise fees. The village also plans to eliminate fees on building permits for replacements, repairs and “small alterations” starting in the spring, according to the news release.

Last month, the village also approved the continuation of the 1% grocery tax once the statewide tax sunsets at the end of this year.