Over Half of Illinois Communities Approve Local Grocery Tax

By Andi Anderson

Starting January 1, Illinois will officially end its statewide 1% grocery tax. However, millions of residents will continue to pay a similar tax locally as more than half of Illinois communities have approved their own grocery tax ordinances.

According to new data from the Illinois Municipal League (IML), 656 municipalities — representing over 7.2 million residents, or 56.5% of the state’s population — have enacted local grocery taxes. In addition, Washington, Wabash, and Moultrie counties have approved countywide grocery taxes to maintain essential funding.

Governor JB Pritzker initially signed the bill eliminating the statewide grocery tax as a step to reduce the tax burden on residents. Yet, the revenue from that tax has historically gone to municipal governments rather than the state treasury. To avoid major financial losses, the law now allows municipalities and counties to pass their own 1% grocery tax through a simple ordinance rather than requiring a public referendum.

“Sales tax revenues — for general merchandise or groceries, alike — are a cornerstone of many local budgets across Illinois, which is why 50.7% of municipalities took action to preserve this funding,” said IML CEO Brad Cole.

The new law required communities planning to collect the tax in January to submit their ordinances to the Department of Revenue by October 1.

Many non-home rule municipalities also used their authority to impose up to a 1% sales tax. Major cities such as Elgin, Rockford, Aurora, Joliet, Naperville, and Peoria joined the list. Without the local tax, Aurora would have faced a $4.5 million revenue loss, according to IML data.

Smaller communities will collect less, with towns like Oregon in Ogle County expecting only around $30,000. The revenue impact will vary widely depending on local grocery activity and store numbers, ensuring each community’s budget reflects its economic landscape.

Photo Credit: pexels-nataliya-vaitkevich