Illinois Politics

Illinois grocery tax eliminated in newly passed budget. Here's what that means for you

The state's newly approved budget has eliminated the grocery tax in Illinois, but that might not be the case for everyone

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Illinois shoppers could soon see a change in the grocery store checkout lines.

That's because the state's newly approved budget has eliminated the grocery tax in Illinois, but that might not be the case for everyone.

The Illinois House passed the $53.1 billion state budget early Wednesday morning, sending it to the governor's desk to sign.

Pritzker called for the grocery tax's removal during his budget address in Springfield earlier this year, with the governor saying the proposed elimination would be a boost for families still hit hard by increasing prices. Pritzker blasted the 1% tax as a “regressive tax” the state doesn’t need.

“If it reduces inflation for families from 4% to 3%, even if it only puts a few hundred bucks back in families’ pockets, it’s the right thing to do,” he said.

The 1% tax on groceries applies specifically to items that are meant to “be consumed off the premises where they are sold,” according to state law.

The tax had been suspended originally from 2022 to 2023 as part of a relief plan for residents battling inflation costs, but it resumed last summer.

According to the Illinois Department of Revenue, for a grocery bill of $145.29, a 1% tax adds $1.45.

More than a dozen states currently tax groceries, and while Pritzker's desire to rid Illinois of the tax has plenty of consumer approval, the state’s current tax adds up to significant revenue for local municipalities.   

Orland Park Mayor Keith Pekau said the change will cut the Chicago suburb's revenue by $2.5 million, for example.

Because the tax directly benefits local communities, the budget plan allows any municipality to create its own grocery tax up to 1% without state oversight. And those with home-rule authority — generally, any city or county with a population exceeding 25,000, would be authorized to implement a sales tax up to 1% without submitting the question to voters for approval.

The budget, which was passed by the Senate over the long Memorial Day holiday weekend, now heads to Pritzker's desk, where it awaits his signature.

Senate lawmakers touted the tax's removal over the long Memorial Day weekend.

“This measure is providing relief to skyrocketing grocery prices,” State Senator Steve Stadelman said in a statement. “By eliminating the state-imposed sales tax on groceries, we can provide financial relief to families across the state, making essential items more affordable.”

Republicans complained that Democrats, who control the Legislature, are spending beyond their means and not preparing for what many predict are lean years ahead. Deputy House Republican Leader Norine Hammond of Macomb said she found at least $1 billion in spending that would be pushed off to the following fiscal year.

“I have a concerns that there are gimmicks in this budget that put us on a path to a giant collision in the future," Rep. C.D. Davidsmeyer, a Jacksonville Republican, told Gordon-Booth. “I hope I don't have to say, ‘I told you so’ when it happens."

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