Liquor Tax Changes Effective March 1, 2026

Chicago Liquor Tax Off Premises Consumption - Frequently Asked Questions

For Retailers with active Chicago "Package Goods" Licenses:

Effective March 1, 2026, a 1.5% tax is imposed on the privilege of purchasing or using, in the City, alcoholic beverages purchased in a sale at retail for consumption off the premises where such alcoholic beverages are sold. The rate of the tax is 1.5% of the retail purchase price for such alcoholic beverages.

Collection and Remittance Requirements as of March 1, 2026:

• Each retailer of alcoholic beverages for consumption off the premises is required to collect the 1.5% tax from the purchaser at the time the sale is made. This new percentage-based tax replaces the per gallon tax that was previously in place.

• Monthly remittances are required to be made to the Chicago Department of Finance by the 15th of the following month (for example: tax payments for March sales are due by 4/15/2026).

• Tax returns are filed annually on a fiscal year (July 1 - June 30) cycle. The return for the period ending June 30, 2026 has a filing due date of 8/17/2026. Tax returns must be filed electronically via Chicago Business Direct.

• All Chicago Package Goods (1474) license holders will be automatically registered for the Chicago Liquor Tax with a March 1, 2026 start date.

• Retailers may take credit for Chicago Liquor Tax that was paid on the per gallon basis to their wholesalers for existing inventory on hand as of March 1, 2026 by offsetting their monthly tax liability until the credit is used up. No refunds will be issued.

• Total alcoholic beverage sales for off premises consumption from March 1, 2026 - June 30, 2026 will be reported on the annual tax return (form 7573) and there will be a separate line to list credit taken for taxes previously paid to wholesalers for inventory on hand as of March 1, 2026. Inventory records are subject to review by the Department of Finance and must be maintained.

Direct to Consumer (DTC) sellersmust begin charging the 1.5% tax instead of the per gallon tax for all sales to Chicago customers that take place as of March 1, 2026.

Distributors and wholesalersshould discontinue charging the per gallon tax for alcoholic beverages delivered to Package Goods license holders registered for the Chicago Liquor Tax as of March 1, 2026. Only alcoholic beverages to be sold for on premises consumption should continue to be taxed on a per -gallon basis, with the distributors collecting and remitting from bars, restaurants, and other venues licensed to allow alcohol consumption on the premises.

For further Liquor Tax questions or assistance with account access or payment procedures, reach out to us at [email protected] or (312) 747-4747.