Illinois eliminated its statewide 1% grocery tax on January 1, 2026. More than half of communities replaced it with a local 1% tax, so most shoppers see no change at the register. The repeal comes from the Illinois Department of Revenue (IDOR) Informational Bulletin FY 2026-03.
Illinois charges a 6.25% statewide sales tax on most goods, and local governments add their own rates on top. Groceries were the reduced-rate exception. That reduced rate is what changed in 2026. Candy, soft drinks, prepared food, and alcohol were never part of it, so their 6.25% treatment is unchanged.
What Changed With the Illinois Grocery Tax in 2026?
The statewide 1% sales and use tax on groceries ended January 1, 2026, per IDOR Informational Bulletin FY 2026-03. The old 1% went entirely to municipalities, so the law let cities and counties enact their own 1% local grocery tax without a referendum. About half of Illinois municipalities did, so more than half of residents still pay 1%.
The enabling law is Public Act 103-0781, signed by Gov. JB Pritzker on August 5, 2024. Ordinances had to be filed with IDOR by October 1, 2025 to take effect January 1, 2026.
| Milestone | Date | Source |
|---|---|---|
| Repeal law (P.A. 103-0781) signed | August 5, 2024 | Gov. Pritzker newsroom |
| Local ordinance filing deadline | October 1, 2025 | IDOR FY 2026-03 |
| Statewide 1% grocery tax ends | January 1, 2026 | IDOR FY 2026-03 |
| Local ordinances filed with IDOR | 600+ as of October 2025 | IDOR FY 2026-03 |
What Is the Illinois Grocery Tax Rate in 2026?
Qualifying groceries are taxed at a 0% state rate, plus a 1% local grocery tax in municipalities that adopted one. Everything else follows the 6.25% statewide base plus local add-ons. The 6.25% state rate applies to most tangible goods, and local governments layer additional rates on top. Groceries were the only reduced-rate food category.
| Category | 2026 rate | Source |
|---|---|---|
| Qualifying groceries | 0% state; +1% local where adopted | IDOR FY 2026-03 |
| Candy | 6.25% + local | IDOR PIO-115 |
| Soft drinks | 6.25% + local | IDOR PIO-115 |
| Prepared food | 6.25% + local | IDOR FY 2026-03 |
| Alcohol | 6.25% + local + excise | IDOR FY 2026-03 |
| SNAP/WIC purchases | Exempt | IDOR PIO-115 |
For the full state and local rate structure, see the Commenda Illinois sales tax rates guide.
What Food Qualifies for the Grocery Rate in Illinois?
Food for home consumption qualifies for the grocery rate. That means staples like milk, bread, produce, and eggs. Candy, soft drinks, prepared food, and alcohol never qualified and stay at 6.25%. IDOR defines qualifying groceries as food for human consumption to be consumed off the premises where it is sold, per IDOR PIO-115.
A gallon of milk shows the new reality. It is now 0% in towns that did not adopt a local tax and 1% in towns that did. The item did not change; the address decides the rate.
Is Candy Taxed as a Grocery in Illinois?
No. Candy is taxed at the full 6.25% rate. But Illinois defines candy as a sugar preparation containing no flour that needs no refrigeration, so flour-containing bars count as groceries instead. This means two near-identical chocolate bars can carry different rates based on the ingredient list, per IDOR PIO-115.
| Item | Contains flour? | Tax treatment |
|---|---|---|
| KitKat | Yes | Grocery rate (0% or local 1%) |
| Hershey’s Milk Chocolate | No | Candy, 6.25% |
| Reese’s Peanut Butter Cup | No | Candy, 6.25% |
That distinction forces retailers to classify by ingredient inspection, a real compliance burden covered again in the retailer section below.
How Are Soft Drinks Taxed in Illinois?
Soft drinks are taxed at the full 6.25% rate. Beverages that are more than 50% fruit or vegetable juice, or that are milk-based, are excluded from the soft drink definition and get the grocery rate. IDOR defines soft drinks as sweetened non-alcoholic beverages, excluding milk-based drinks and those over 50% juice, per IDOR PIO-115.
A can of cola is taxed at 6.25%. A carton of 100% orange juice gets the grocery rate. The sugar content is similar; the juice percentage decides the category.
What Is the Prepared Food Tax in Illinois?
Hot, ready-to-eat food is taxed at 6.25% plus local rates. That covers rotisserie chicken, deli sandwiches, and restaurant takeout, taxed the same on- or off-premises. The 2026 grocery change does not touch prepared food, per IDOR FY 2026-03. Prepared food is what the term “food and beverage tax” usually refers to.
Some localities add their own food-and-beverage taxes on top of the state and local sales tax. Chicago is the clearest example, covered in the Chicago section below.
How Is Alcohol Taxed in Illinois?
Beer, wine, and spirits are taxed at the full 6.25% sales tax rate plus local rates, plus separate Illinois excise taxes. Retailers apply both at the point of sale. Illinois gallonage (excise) taxes add $0.231 per gallon on beer, $1.39 per gallon on liquor at 20% alcohol by volume (ABV) or less, and $8.55 per gallon on liquor above 20% ABV, per the IDOR Liquor Gallonage Tax page.
Effective with the July 2026 reporting period, IDOR classifies these rates by ABV rather than by product type, per the same guidance. Alcohol was never a grocery-rate item, so the 2026 repeal does not affect it.
Are SNAP and WIC Purchases Taxed in Illinois?
No. Purchases made with Supplemental Nutrition Assistance Program (SNAP) or Women, Infants, and Children (WIC) benefits are fully exempt from Illinois sales tax, regardless of item category. That exemption covers candy and soft drinks too, per IDOR PIO-115. The 2026 repeal does not change it.
A family buying bread, soda, and a candy bar with SNAP benefits pays no sales tax on any of those items.
Which Illinois Cities and Counties Charge a Local Grocery Tax?
More than half of Illinois municipalities enacted a local 1% grocery tax before the October 1, 2025 deadline, so whether you pay 1% or 0% depends on your town. Illinois Municipal League (IML) data, reported by Capitol News Illinois on October 14, 2025, puts the count at 656 municipalities.
| Metric | Figure | Source |
|---|---|---|
| Municipalities that adopted a local grocery tax | 656 (50.7%) | Capitol News Illinois, Oct. 14, 2025 |
| Residents covered | 7.2 million (56.5% of population) | Capitol News Illinois, Oct. 14, 2025 |
| Counties adopting countywide | 3 (Washington, Wabash, Moultrie) | Capitol News Illinois, Oct. 14, 2025 |
A county grocery tax applies only in unincorporated areas and does not stack on top of a municipal tax, per IDOR FY 2026-03. To check your town, look up its ordinance on the IML adopted-list and confirm the combined rate for your address in IDOR’s rate lookup.
What Is the Chicago Grocery and Restaurant Tax Rate?
Chicago did not adopt the local 1% grocery tax, so qualifying groceries are taxed at 0% in the city, per Capitol News Illinois. Prepared food is a different story: the general combined rate is 10.25%, and downtown restaurant meals climb above 11% once the city restaurant tax and the Metropolitan Pier and Exposition Authority (MPEA) food and beverage tax apply.
| Item | Rate | Source |
|---|---|---|
| Chicago local grocery tax | 0% (not adopted) | Capitol News Illinois, Oct. 14, 2025 |
| General combined sales tax | 10.25% | Civic Federation, 2026 |
| Chicago restaurant tax (prepared food) | +0.25% | Civic Federation, 2026 |
| MPEA food and beverage tax (downtown) | +1% | IDOR MPEA guidance |
How Do Retailers Charge and File Sales Tax on Groceries in Illinois?
From January 1, 2026, retailers in adopting municipalities collect the local 1% on qualifying groceries, retailers elsewhere charge 0%, and all retailers report grocery sales differently on Form ST-1 (Sales and Use Tax and E911 Surcharge Return), per IDOR FY 2026-03. The old state 1% line is gone; the local line replaces it where a tax exists.
Three compliance risks now stack up. Ingredient-based classification decides whether a bar is candy or a grocery, as with the flour rule. Multi-location stores must track a town-by-town patchwork. Misclassification exposes retailers to audits and penalties. Retailers registering to collect can start with the Commenda Illinois sales tax permit guide.
What Are the Illinois Grocery Tax Rules for Online Sellers?
Remote and online sellers shipping groceries into Illinois apply the destination jurisdiction’s rules. The same item can be 0% or 1% depending on the delivery address. Sellers must first establish whether they have physical or economic nexus in Illinois before they collect at all.
Destination-based rules mean a seller shipping to 200 towns may face 200 different grocery outcomes. Use the Commenda US nexus exposure guide to confirm where you owe, and the Commenda sales tax calculator to check destination rates.
How Commenda Helps With Illinois Grocery Tax Compliance
The 2026 change turned one statewide rule into a town-by-town patchwork. That is exactly the tracking problem Commenda’s global indirect tax software solves: correct rates by product category and jurisdiction, monitored rule changes, and filing support across 100+ ERP, API, and custom integrations. Commenda’s in-house tax team reads the actual state statutes, so a nuanced carve-out like the candy flour rule maps to the right taxability.
Look up destination rates with the Commenda sales tax calculator, confirm where you owe with the US nexus exposure guide, and register with the Illinois sales tax permit guide. See how Illinois compares nationally on the sales tax on groceries by state guide; Illinois now uses an unusual local-option model.
Book a demo to see every Illinois jurisdiction where you owe grocery tax before your next ST-1 is due.
