Governor JB Pritzker Signs Law Eliminating Illinois’ Grocery Tax Starting in 2026

Governor JB Pritzker signed legislation on Monday to eliminate Illinois’ 1% tax on groceries, effective January 1, 2026. This change is part of Pritzker’s 2025 budget plan, which aims to address regressive taxes that disproportionately impact low-income families.

The Illinois General Assembly approved the legislation in May when it passed Pritzker’s budget plan. The tax will still apply to alcohol, cannabis-infused food, soft drinks and candy.

While the elimination of the grocery tax promises relief for consumers, it raises concerns for local governments that rely on this revenue. The state grocery tax revenue traditionally goes to municipal governments, not state coffers. To address potential revenue shortfalls, the new law allows counties and municipalities to levy their own 1% grocery taxes by passing ordinances, bypassing the need for a referendum. It also grants non-home rule municipalities the authority to impose sales taxes up to 1% without a referendum.

Illinois was one of just 13 states to tax groceries.