Arlington Heights Board Approves Streaming Tax Along With Grocery Tax

The Arlington Heights village board recently made some decisions that impact residents. They approved a new 5% tax on streaming services and opted to continue a 1% tax on groceries in two separate votes.

During the meeting, the streaming tax passed by a 7-2 vote, while the grocery tax was approved by a 6-3 margin. The board discussed that without these taxes, property taxes might have gone up by as much as 8.25% to make up for the lost revenue.

The streaming tax is meant to make up for declining revenues from cable franchise fees. Cord-cutting residents have caused the village to lose around $2.5 million in annual revenue. The new tax aims to generate about $480,000 per year to help fund additional ambulance services.

Those who use streaming services still rely on infrastructure that needs maintenance, like cable lines or repeater stations. The 5% tax will apply to each service a resident signs up for. For example, a Disney Plus subscription of $159.99 would have an additional tax of $8.

The grocery tax, currently collected by the state of Illinois, will be handled by municipalities starting Jan.1. More than 360 communities have chosen to keep this tax, including Arlington Heights, which expects to raise $1.3 million in revenue from it.

The state of Illinois temporarily suspended the grocery tax in 2022 due to pandemic-related budget agreements. However, it is set to return in 2023. Illinois Gov. J.B. Pritzker announced that the tax will be eliminated on Jan. 1, 2026, as part of the new fiscal year’s budget.