Illinois ends state grocery tax Jan 1 — but local taxes are coming

TL;DR

• Illinois ends 1% state grocery tax on Jan 1, 2026
• Local grocery taxes may take effect Jan 1 or July 1
• Soda, candy, alcohol, and prepared foods still taxable
• Some regional transit district taxes will remain unchanged

What’s changing

• State-level repeal: 1% grocery tax ends Jan 1, 2026
• Local opt-in: Counties/municipalities may impose 1% local tax
• Ordinance deadlines:
  • Filed by Oct 1, 2025 → local tax starts Jan 1, 2026
  • Filed by Apr 1, 2026 → local tax starts July 1, 2026
• Scope: Applies only to food for human consumption
• Exclusions: Candy, soda, alcohol, cannabis, and hot/prepared foods

Who this affects

• Grocery stores, bodegas, and meal kit sellers with Illinois customers
• Retailers with in-store or delivery operations in Illinois municipalities
• Tax teams needing to track variable local food tax rates by jurisdiction
• Platforms with Illinois-based merchants selling food

Why this matters

This change removes a flat state grocery tax but replaces it with the potential for hundreds of local tax configurations. Sellers won’t just need to update rate tables once — they’ll need to monitor where and when local grocery taxes apply.

If you sell food in Illinois, expect the map to get messier — and make sure your POS or tax engine is ready for county-level complexity.

TaxCloud tracks all local rate changes — including food-specific rules. Food sales can get complicated. TaxCloud automatically updates local rates and taxability rules for groceries, candy, soda, and prepared foods across every U.S. jurisdiction. No manual table updates required.

Next steps

• Confirm if you sell grocery items to Illinois customers
• Monitor local tax adoptions starting Jan 1 and July 1, 2026
• Use automated software like TaxCloud to track rate changes at the county and city level