Illinois DOR Eliminates Grocery Sales Tax, Allows Local Tax Options

The Illinois Department of Revenue (DOR) published an informational bulletin announcing that, effective Jan. 1, 2026, the state will eliminate its 1 percent sales and use tax on grocery sales, requiring retailers to report these sales differently on tax returns. However, municipalities and counties are authorized to impose their own 1 percent local grocery tax by ordinance, with the same effective date for ordinances filed by Oct. 1, 2025, or later effective dates based on future filing deadlines. [Il. Dep’t of Revenue, Informational Bulletin FY 2026-03, 10/06/25]

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