The Madison City Council is expected to vote Monday on a proposal to annex the Costco Wholesale store into the City of Madison, a move that would bring the retailer under city jurisdiction and formalize how tax revenue from the site is distributed.
Costco is currently located on unincorporated Madison County land. The annexation vote would be paired with council approval of a development agreement outlining how sales tax and other revenue generated at the site would be shared between Madison and the property’s developer.
While a development fee of 2% is already in place, the city of Madison currently receives no revenue from the successful wholesaler.
Following a first reading earlier this month, the Madison City Council is set to vote Monday, January 12, 2026, on the proposed annexation of Costco, with the city issuing a statement afterward highlighting the potential revenue:
“The Madison City Council heard a first reading on an item to annex Costco into the City of Madison. Costco is a nationally respected retailer known for quality products, strong customer loyalty, and responsible corporate practices. Annexation would create a stable revenue stream that benefits City of Madison taxpayers. This item was a first reading only; the final Council vote is scheduled for January 12, 2026.”
The proposal comes as Madison continues to grow and works to expand its commercial footprint. Supporters of the annexation say bringing Costco into the city limits aligns the retailer more closely with the community it serves and allows Madison to capture revenue from an established business already operating just outside its boundaries.
The annexation and development agreement requires a majority vote from the City Council. If approved, the changes would take effect following final council action and required filings.
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