Illinois ends state grocery tax Jan 1 — but local taxes are coming
Effective January 1, 2026, Illinois will eliminate its 1% state sales tax on food for human consumption. But the door is open for local governments to charge their own 1% grocery tax — and many plan to.
Written by Alex Lamachenka
Head of DemandGen
Published
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 (56 municipalities and 3 counties have now done this — see July 2026 update below)
- 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.
If you use TaxCloud
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
July 2026 update: 56 more municipalities and 3 counties adopt local grocery tax
A second wave of Illinois localities has adopted the 1% local grocery occupation tax, effective July 1, 2026. This follows the more than 600 localities that began imposing the tax on January 1, 2026. [1]
The following municipalities are imposing a 1% local grocery tax starting July 1, 2026:
Alexis (Mercer), Alexis (Warren), Alpha, Alto Pass, Aroma Park, Ava, Belle Rive, Bishop Hill, Bradford, Brooklyn, Brussels, Buda, Butler, Caledonia, Casey (Clark), Casey (Cumberland), Divernon, Edgewood, Farmersville, Flanagan, Flat Rock, Germantown Hills, Gulfport, Harmon, Hillcrest, Hinckley, Iola, Ipava, Joy, Karnak, Keithsburg, Kempton, Kirkland, Limestone, Loami, Long Creek, Matherville, Medora (Jersey), Medora (Macoupin), Mount Erie, Mundelein, New Minden, Nora, North Barrington, Oakland, Payson, Prairie du Rocher, Saybrook, Sheldon, Sleepy Hollow, St. Libory, Stonington, Stoy, Stronghurst, Sublette, Ullin, Union, Verona, Woodlawn
The following counties are imposing a 1% local grocery tax starting July 1, 2026 (applies to unincorporated areas of the county only):
Jackson, Kane, Wayne
Note on county rates: If both a municipality and a county impose the local grocery tax, the rate is still 1% total, not 2%. Counties are only authorized to impose the grocery tax in unincorporated areas. The additional Regional Transportation Authority (RTA) and Metro-East Mass Transit District (MED) grocery taxes remain in effect where applicable.
If you sell grocery items and deliver to any of these addresses, your tax calculation engine must apply the 1% local grocery occupation tax starting July 1, 2026. Use the MyTax Illinois Tax Rate Finder at mytax.illinois.gov to verify combined rates for July 2026 by address.
Official sources:
-
1.
Illinois Department of Revenue FY 2026-25, Municipal and County Grocery Occupation Tax Rate Changes, Effective July 1, 2026. Source link
- 2.
Disclaimer
TaxCloud provides sales tax compliance solutions. We do not provide legal or tax advice. For questions about your specific tax situation or filing requirements, we recommend consulting a qualified sales tax accountant.
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