Illinois killed its grocery tax — but most shoppers still won’t save a dime

State ends grocery tax, locals bring it back

Illinois got rid of its 1% statewide grocery tax on Jan. 1, 2026.

Gov. J.B. Pritzker signed the bill into law back in August 2024, framing it as relief for families dealing with high food costs.

But here’s the catch: the same law lets cities and counties pass their own 1% grocery tax without putting it to a vote.

More than 650 municipalities have done exactly that, so most shoppers won’t see any savings at the register.

The tax only covered certain foods

The 1% tax applies to food meant to be eaten at home, not at a restaurant or store counter. Prepared meals, candy, soft drinks, and alcohol didn’t qualify for the lower rate.

Those items fell under the state’s general merchandise tax of about 6.25%.

So when people talk about the “grocery tax,” they mean the basics: bread, milk, meat, produce, and other staples you’d bring home and cook yourself.

Illinois has taxed groceries since 1990

The state first introduced the 1% grocery tax in 1990 as part of a bigger sales tax overhaul. Before that, grocery tax rules varied from town to town, creating a confusing patchwork.

The 1990 reform brought everything under the Illinois Department of Revenue.

The state collected the money and sent it back to local governments, which came to depend on it as a steady source of funding for their budgets.

A one-year pause saved shoppers millions

Before making the cut permanent, Illinois tested the waters.

The state suspended the grocery tax from July 2022 through June 2023 as part of an inflation relief package. The Illinois Policy Institute estimated residents saved about $360 million during that year.

Once the suspension ended, the tax came back and stayed in place until the permanent repeal kicked in on Jan. 1, 2026.

Local governments can now set their own tax

The new law, Public Act 103-0781, gives every municipality and county in Illinois the power to impose its own 1% grocery tax. All a city or county needs to do is pass an ordinance.

No public vote required.

The Illinois Department of Revenue collects the tax on behalf of each city that opts in, so the process works much like the old state tax did, just with local control.

Over 650 cities filed to keep the tax

By October 2025, about 656 municipalities had filed local grocery tax ordinances, according to the Illinois Municipal League. That’s more than half of all cities and towns in the state.

The Department of Revenue confirmed receiving more than 600 of those filings. Cities had to get their ordinances in by Oct. 1, 2025, for the local tax to start on Jan. 1, 2026.

Cities say they need the revenue

Local governments moved fast because they couldn’t afford to lose the money.

Grocery tax revenue had helped pay for police, fire departments, road repairs, and public works for decades. Without a replacement, many cities warned they’d face budget shortfalls.

The Illinois Municipal League pushed hard for the local taxing option, arguing it was the only way to keep basic services funded after the state stepped away.

Your savings depend on where you live

If your city adopted the local tax, your grocery bill would look the same as it did last year. If your city didn’t, the 1% charge disappears from your receipt.

Either way, the law says your grocery tax rate on Jan. 1, 2026, can’t be higher than it was on Dec. 31, 2025.

Residents can check their local rate using the MyTax Illinois Tax Rate Finder on the state revenue department’s website.

Chicago-area shoppers still pay extra taxes

The Regional Transportation Authority (RTA) and Metro-East Mass Transit District impose their own grocery taxes, and the new law didn’t touch those.

So even in RTA or Metro-East areas where the city didn’t adopt a local grocery tax, shoppers still pay something. The rate dropped by 1% in those spots, but it didn’t go to zero.

Chicago-area residents should check their receipts carefully to see exactly what they owe.

More cities could still opt in later

Cities that missed the October deadline aren’t out of luck. If a municipality files an ordinance by April 1, the tax kicks in on July 1.

File by Oct. 1, and it starts the following January.

That means the list of cities collecting the grocery tax could keep growing throughout 2026 and beyond. Shoppers in tax-free areas today might not stay that way for long.

Other states are watching Illinois closely

Illinois isn’t alone in dropping its grocery tax. Arkansas also eliminated its statewide grocery tax on Jan. 1, 2026.

Most states don’t tax groceries at all, but a handful still do. Mississippi, Idaho, and South Dakota charge higher rates on food.

Several other states have bills in the works to reduce or end their grocery taxes, making this a trend worth following across the country.

How to check your local grocery tax

Want to know if your city opted in? Head to the MyTax Illinois Tax Rate Finder on the state revenue department’s website and select rates for January 2026.

The department also publishes a grocery tax ordinance status report.

The definition of “groceries” under the local tax matches the old state tax, so the same items are covered. If you’re still unsure, check your grocery receipt for the line-item tax breakdown.

This article was created with AI assistance and human editing.

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