Illinois eliminates state grocery sales tax starting January 1, 2026

Illinois’s decision to eliminate the state grocery tax simplifies part of the tax calculation, but it also introduces new local-level complexity. Counties and municipalities may now impose their own grocery taxes on different timelines, creating a patchwork of rules sellers must track. To understand the full scope of what’s changing — including timelines, exclusions, and who is affected — see our detailed breakdown of Illinois grocery tax changes for 2026.

What changed

• Previous rule: Grocery sales were subject to a 1% Illinois state sales tax, with additional local taxes in some jurisdictions.
• New rule: The Illinois state grocery tax is eliminated, but municipalities and counties may continue to impose local grocery taxes.
• Effective date: January 1, 2026.

Who this affects

• Grocery stores and food retailers
• Convenience stores selling qualifying grocery items
• Retailers selling groceries inside RTA or MED areas
• Ecommerce sellers shipping grocery items to Illinois addresses

What sellers should review

• Confirm that grocery items are no longer subject to the Illinois state sales tax beginning January 1, 2026.
• Review local grocery tax rules, which may still apply depending on location.
• Ensure reporting correctly includes grocery receipts even when the state tax rate is zero.
• After calculation is correct, verify January 2026 grocery sales are reported accurately on February 2026 returns.