Illinois eliminates state grocery sales tax starting January 1, 2026
Illinois has eliminated its 1% state sales tax on grocery items. While the state-level grocery tax is ending, local grocery taxes may still apply depending on the location of the sale.
Written by Ryan Pinkham
VP of GTM
Published
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
If you use TaxCloud
TaxCloud automatically updates its sales tax calculation engine to reflect state and local grocery tax changes, so sellers do not need to manually adjust rates.
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.
Official sources:
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Illinois Department of Revenue ST-1 Instructions (for reporting periods January 2026 and after). Source link
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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