(The Center Square) – About 200 municipalities have plans to reimpose Illinois’ grocery tax locally, and the state’s largest city may be among those joining the group.
Gov. J.B. Pritzker approved the Jan. 1, 2026, elimination of the one-percent state tax last year, leaving municipal leaders to replace the revenue.
Chicago Mayor Brandon Johnson said municipalities now have the responsibility of collecting the one-percent tax.
“So it was a function that the state of Illinois decided to relinquish and leave it to the cities to collect the tax. We’re not creating a grocery tax. We’re just creating a process by which we can collect it,” Johnson said.
Chicago Budget Director Annette Guzman said the city must reaffirm the tax before Oct. 1.
“Allowing that tax to lapse in January 2026 would cost the corporate fund an estimated $80 million next year alone, further exacerbating our billion-dollar-plus gap,” Guzman said before a city council finance subcommittee on revenue this week.
The city’s chief financial officer, Jill Jaworski, also favored the grocery tax in the wake of the city’s recent credit downgrades.
“We want to find ourselves on strong financial footing and can only do so by extending revenue measures that are ongoing in nature,” Jaworski said, referring to such measures as “structural solutions.”
Elizabeth Powers, associate economics professor at the University of Illinois in Champaign, addressed criticism of the grocery tax as regressive. Powers told the subcommittee the tax is not regressive because purchases with Supplemental Nutrition Assistance Program (SNAP) benefits are exempted.
“The effective tax rate due to the grocery tax on the lowest 20% of households by income is just .01%, or that’s a rate of .0001,” Powers said.
Chicago’s sales tax rate is 10.25%, including the combination of state and local taxes.
Naperville officials said the state’s move to eliminate the grocery tax would leave the city with a potential $6.1 million budget hole. The Naperville Area Chamber of Commerce presented three options on its website earlier this week: re-enacting the grocery tax, raising the home rule sales tax by 0.25% or reducing programs and services, which “could include staff layoffs.”
Gurnee officials discussed the grocery tax issue at a village board meeting on May 19. Gurnee finance director Brian Gosnell said the staff recommendation was to raise the village’s home rule sales tax from 8% to 8.5% and not implement the 1% grocery tax.
Rockford has yet to implement the grocery tax, but city officials have plans to discuss it before the Oct. 1 deadline.
