Taxing prepared food and beverages in Galesburg

March 17, 2011 03:13 PM
Galesburg, IL (March 17, 2011) On July 1, 2011 the 1% sales tax for education approved by voters in
Knox County will be implemented. Proceeds from the tax will be distributed to school districts based on
their enrollment. More than half of the funds raised will go to Galesburg School District 205. Groceries,
automobiles, farm equipment, fertilizer and medical drugs will be exempt from the new sales tax but will
affect all other sales in Knox County, including prepared food and beverages. The addition of the new
education sales tax means prepared food and beverages sold within the city of Galesburg will increase
from 9.5% to 10.5%.

The city of Galesburg implemented a 2% prepared food and beverage tax in April, 2007. At the time,
council members decided this tax would be preferred to raising property taxes. By taxing a non-essential
item, it was felt the burden would be borne by those who could make the choice on whether or not to dine
out and, therefore, pay the tax. In addition, the tax would be shared by all who patronized Galesburg’s
restaurants and bars regardless of whether or not they lived within the city limits. 

The breakdown of the 10.5% tax on prepared food and  beverages is: 8.5% sales tax (6.25% State; 1%
City; 1% County-Education; 0.25% County-Public Safety); and 2% prepared food and beverage tax

The food and beverage tax is an important source of general fund revenue for the city. The general fund
helps pay for basic services including parks, recreation facilities, streets, sidewalk and bridge
maintenance, heavy equipment and other vehicles,  airport and cemetery operations, public transit
services, emergency services and vehicles, inspections and much more.

The Galesburg City Council is open to hearing ideas and discussing options on how to maintain the level
of services currently provided by the city.


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