(CHICAGO, January 3, 2026) – More than 7.2 million Illinois residents will continue to pay a tax on groceries despite a statewide suspension of the 1% grocery tax that began on New Year’s Day.
Despite a statewide tax suspension, local taxes mean millions of Illinoisans will still pay a grocery tax.
- illinois ended its 1% state grocery tax on January 1, 2026.
- More than 7.2 million residents live in areas where local taxes will continue to apply.
- Local taxes range from 0.5% to 1.25% in affected areas.
Even though Illinois ceased collecting a 1% tax on groceries statewide on january 1, a notable portion of the population will not see a reduction in their grocery bills, as local taxes remain in effect, according to reports.
The state’s suspension of the tax is expected to save shoppers roughly $143 million annually, but this benefit will not be universally felt. Approximately 7.2 million people reside in municipalities and counties that maintain their own grocery taxes, ranging from 0.5% to 1.25%.
What This Means for You
For residents of Chicago, the state’s largest city, a 1.25% tax will continue to be applied to most grocery purchases. This means that for every $100 spent on groceries, Chicagoans will still pay $1.25 in taxes. Other areas affected include several counties in Southern Illinois, where local grocery taxes are still in place. Shoppers in these areas should check with their local governments to determine the exact tax rate.
The continuation of local grocery taxes highlights the complex interplay between state and local fiscal policies. While the state-level suspension provides some relief, the impact is diminished for residents in areas that rely on grocery taxes as a source of revenue.
“The state’s action is helpful, but it doesn’t eliminate the tax burden for everyone,” said a representative from the Illinois Retail Merchants Association.
The state’s suspension of the grocery tax was part of a larger tax relief package aimed at easing the financial burden on Illinois families. However, the uneven submission of the relief underscores the importance of understanding local tax laws.
Time.news based this report in part on reporting by [Outlet Name] and added independent analysis and context.
Why: The Illinois state government suspended its 1% grocery tax to provide financial relief to residents.
Who: Over 7.2 million Illinois residents will continue to pay a grocery tax due to local taxes. Affected areas include Chicago (1.25% tax) and several Southern Illinois counties. The Illinois Retail Merchants Association also commented on the situation.
What: A statewide 1% grocery tax in Illinois was suspended on January 1, 2026, but local taxes ranging from 0.5% to 1.25% remain in effect in many areas.
How did it end?: The suspension of the state tax is expected to save shoppers $143 million annually, but the impact is lessened for those in areas with local taxes. The situation highlights the complex relationship between state and local fiscal policies, and the need for residents to understand their local tax laws.
