On October 21, Mayor Brandon Johnson presented his 2027 budget, a $17.6 billion spending plan about $760 million larger than the 2026 budget. To pay for it, the proposal relies heavily on new and higher taxes on businesses. Here's what our clients should know.
Taxes
Liquor tax: The tax on liquor bought for off-premises consumption doubles, from 1.5% to 3%. Delivery companies that take orders and payments for retail liquor dealers would also have to collect and remit the tax.
Head tax: A new $25 per month tax for each full-time employee, on employers with 125 or more full-time employees working in Chicago. Employees count if they do at least half their work in the city. A new SEED credit offsets the tax for employees who work mostly at locations in the City's socio-economically disadvantaged areas.
Packaging tax: A new $0.15 tax per package on single-use shipping and carry-out packaging, expanding the existing checkout bag tax. Restaurant dine-in and take-out packaging, the manufacturer's original packaging, and medicine packaging are exempt.
Amusement tax exemptions: The requirement to file advance notice with the Department of Finance before claiming certain amusement tax exemptions (such as for charitable events) would be eliminated. Instead, anyone claiming an exemption must keep records showing it applies for at least five years and produce them to the Department on request.
Licenses, permits, and fees
Mobile food carts: A new "mobile food cart preparer" category of the Mobile Food Vendor license would, for the first time, let vendors prepare food on the cart. Until now, carts could only sell food that was already prepared and wrapped. The license is $500 for a two-year term. Applicants need a Health Department consultation, a commissary, and a cart inspection. Carts must keep moving (no more than four hours per block), can't stop within 200 feet of a street-level restaurant entrance except between midnight and 2 a.m., can't sell between 2 and 5 a.m., and can't sell or carry alcohol. Violations carry fines of $200 to $1,000 per day.
Special events: The outdoor special event rules are rewritten. Application fees would be tiered by attendance: $500 (up to 1,500), $2,500 (up to 10,000), $8,000 (up to 50,000), and case-by-case above that. Street closure fees and City service costs would also apply. Events over 10,000 attendees would need a community engagement plan.
Nothing is final yet. The proposals are before the City Council's Committee on Finance and would take effect January 1, 2027, if passed. If you hold a package goods license, sell alcohol through delivery apps, run events, or are thinking about a food cart, reach out and we can walk through how these changes affect you.