CHICAGO (CN) — Democratic Illinois Governor J.B. Pritzker signed a bill repealing the state's 1% grocery tax on Monday, a move the governor committed to in the 2025 budget this past June.
The bill, which was sponsored by state Democratic legislators, passed both houses of the Illinois Legislature in June. A similar Republican-backed bill floundered in Springfield in February. That bill would have used money from the state's general fund to cover lost revenue for municipalities — the Democratic bill Pritzker signed Monday instead allows Illinois counties and municipalities to implement their own, local state grocery tax ordinances after 2026.
Pritzker pitched the bill as a way to give Illinoisans relief from inflation at the grocery store. According to the U.S. Department of Agriculture, grocery prices nationwide have increased by about 20% since 2020.
Aggravating factors include the Covid-19 pandemic, an avian flu outbreak among farm poultry and the Russia-Ukraine war. Inflation has slowed since last year, with grocery prices this past June only increasing a little over 1% since June 2023, though the Agriculture Department forecasts prices will continue to slowly rise through 2025.
"Every dollar counts as families fight inflation and rising prices," Pritzker said in a prepared statement.
The state previously put a hold on the tax between July 1, 2022 and July 1, 2023, covering an election cycle, as part of an effort to combat inflation. The renewed abolition of the tax will not be immediate. The grocery tax will stay in place until the start of 2026. Even after that, the tax will still apply to alcohol, cannabis-infused food, soft drinks and candy.
Grocery shoppers in Chicago received the news tepidly on Monday. Courthouse News spoke with half a dozen shoppers outside a local Aldi, none of whom even knew that the state had a grocery tax. The shoppers also said they doubted the end of a 1% tax would have any effect on their shopping habits.
"Oh no, but I'm sure it will for other people," one elderly shopper going by Kathleen told Courthouse News, when asked if the end of the tax would make a difference for her.
"Honestly, probably not," answered a young woman who asked to remain anonymous, in response to the same question.
"I definitely spend more time price checking than before," the same shopper said, when asked how inflation had affected her grocery shopping. But she wasn't aware there was a grocery tax contributing to increased prices.
"I haven't lived in the state long enough," she said.
Illinois is one of 13 states that currently implements some form of tax on groceries, alongside Hawaii, Idaho, Utah, South Dakota, Kansas, Oklahoma, Missouri, Arkansas, Tennessee, Mississippi, Alabama and Virginia. The specifics of each state's tax differ. Some — Idaho, South Dakota, Oklahoma and Mississippi — tax groceries at the general sales tax rate and others implement a lower rate.
Mississippi has the highest grocery tax, reflecting the state sales tax rate of 7%. Arkansas has the lowest rate at 0.125%. Kansas plans to phase out its grocery tax by next year.
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