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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.

Alex_Lamachenka_TaxCloud

Written by Alex Lamachenka

Head of DemandGen

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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.

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

Official Source:

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