Written By: Margaret Borla, CPA, Senior Manager & Ashley Trabaris, CPA, MST, Senior Manager
To all retailers registered in Illinois:
Effective January 1, 2026, Illinois will eliminate the one percent (1%) statewide sales and use tax on grocery sales.
Accompanying this change, municipalities and counties are allowed to impose their own local grocery tax at 1%.
To account for this change, Forms ST-1 and Form ST-2 will be revised and the local 1% grocery tax must be reported on a new line – Step 3 Line 5c. Beginning January 1, 2026, all retailers must use the revised forms to report IL sales and use tax for periods. If you are filing electronically at mytax.illinois.gov, the correct version of the forms will populate automatically.
If your locality implements a local 1% grocery tax, your total tax rate on grocery sales will not change. Similarly, the current local grocery tax in Regional Transportation Authority (RTA) or Metro-East Transit District (MED) locations will remain in place.
Local ordinances that were filed by October 1, will take effect on January 1 of the following year. To view the status of ordinances filed, please go to the Local Government Grocery Ordinance Status Report page. IDOR will also notify retailers located in a municipality or county that is imposing the 1% local grocery tax with an informational bulletin via a MyTax Illinois message or a physical mailing.
Food items that are eligible to be taxed at the local grocery tax rate of one percent (1%) are categorized as “Groceries”. “Groceries” will be the same kinds of food items that were eligible to be taxed at the statewide low tax rate of one percent (1%) and were categorized as “qualifying food”. The following do not qualify as “groceries” and will continue to be taxed at general merchandise rates, also known as the high rate:
- Alcoholic beverages
- Food infused with adult-use cannabis
- Soft drinks
- Candy
- Food prepared for immediate consumption.
Important Links:
ILDOR Bulletin: FY 2026-03, Illinois Grocery Tax Changes Effective January 1, 2026
Check the status of grocery tax ordinances by location: Grocery Tax Ordinance
Please contact a member of the Porte Brown State and Local Tax team if you have any questions.
