Gov. JB Pritzker has signed a law ending Illinois’ 1% grocery tax starting January 1, 2026, aiming to ease financial pressure on families, though local governments are concerned about replacing the lost revenue.
Illinois to Eliminate 1% Grocery Tax in 2026, Raising Concerns Over Local Budget Shortfalls
According to CBS News, Gov. JB Pritzker signed a new law on Monday that will remove Illinois’ 1% grocery tax starting January 1, 2026. Pritzker pushed for this change in his 2025 budget plan, arguing that the tax unfairly impacts low-income residents. With the Illinois General Assembly’s approval and Pritzker’s signature, Illinois will soon join most states that do not tax groceries.
This change aims to reduce financial stress for Illinois families, but it’s causing concern for local governments that depend on this revenue. For example, Libertyville, which gets $850,000 from the grocery tax, and Algonquin, which receives $2 million, are worried about how they will manage their budgets without this money.
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850,000 to $0: Illinois Ends 1% Grocery Tax – Local Governments Scramble to Fill Budget Gaps (PHOTO: Chicago Sun-Times)
Local Governments May Reinstate Grocery Tax Despite Statewide Elimination
Even though the state is eliminating the grocery tax, local governments have the option to reinstate it if needed. Libertyville plans to keep the tax to avoid budget problems, while Algonquin is still deciding what to do.
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