Wineries Must Pay New Chicago Liquor Tax on DTC Sales

The City of Chicago has begun implementing the new additional 1.5% tax on all off-premises sales of alcohol. This includes DTC wine shipments to Chicago. As you will recall, Wine Institute worked with the local hospitality coalition to get the tax reduced from the initial 3% proposed tax rate.

The city has issued guidance on the change, which indicates that DTC sellers will need to charge the 1.5% tax on the retail price of the wine instead of the per gallon tax for all sales shipped to a Chicago address that take place as of March 1, 2026.

Members are advised to list the 1.5% city liquor tax on its own line on the receipt and not combine it with the sales and use tax rate that is collected and remitted to the Illinois Department of Revenue (DOR) to assist in distinguishing the tax for any potential records review by the city or DOR.