Chicago’s New 1.5% Liquor Tax: Key Considerations for Retailers

The City of Chicago has announced a significant change affecting the retail sale of ‘package’ alcoholic beverages for off-premises consumption.

Effective March 1, 2026, the City will impose a new 1.5% Liquor Tax on alcoholic beverages sold at retail for off-premises consumption within Chicago.

Key highlights of the new tax include:
• The tax applies to package alcoholic beverages purchased for off-premises consumption.
• The rate is 1.5% of the purchase price, exclusive of other applicable taxes.
• Retailers are required to collect the tax from purchasers at the point of sale.
• Only Package Goods Liquor License holders must collect and remit the tax to the City of Chicago Department of Finance.
• Payments will be due monthly by the 15th day of the following month.
• Tax returns will be filed annually on business’ Chicago Business Direct Accounts.
• The first filing period will cover March 1, 2026 through June 30, 2026, with a filing deadline of August 17, 2026.

This change will impact pricing, POS systems, tax reporting and compliance procedures for many liquor stores or other businesses who hold a City of Chicago Package Good liquor license.

For questions about how this new tax applies to your business, licensing structure or reporting obligations, please do not hesitate to contact Jennifer Niesen or any member of our team.

Christopoulos Law Group is the premier, Chicago-based law firm representing clients nationwide in all tiers and facets of the Beverage Alcohol and Hospitality Industry. Combined, our seasoned professionals bring over five decades of years of experience to clients and provide substantial legal services to the industry, including related litigation, the acquisition and sale of brands, distributorships and retail establishments, the negotiation of distribution and other related agreements, federal, state and local license applications and federal and state trade practice advice