The Chicago grocery tax is effectively 0% as of January 1, 2026. Illinois eliminated its statewide 1% tax on food for home consumption on that date, and Chicago did not pass a local ordinance to replace it before the state’s filing deadline.1Illinois Department of Revenue. Illinois Grocery Tax Changes Effective January 1, 2026 Qualifying groceries in the city now ring up tax-free, though several categories you might pick up on the same trip still carry the full sales tax rate.
What the 2026 Change Actually Did
Through the end of 2025, Illinois imposed a 1% tax on food purchased to eat off the premises where it was sold. Retailers collected it at the register and remitted it to the state.2Illinois General Assembly. 35 ILCS 120 2-10 – Rate of Tax
Public Act 103-0781 made qualifying grocery food fully exempt from the state sales and use tax starting January 1, 2026. The same law let municipalities and counties adopt their own local grocery tax, capped at exactly 1%, by ordinance.1Illinois Department of Revenue. Illinois Grocery Tax Changes Effective January 1, 2026
Chicago did not file. The city missed the October 1, 2025 deadline required for a January 1, 2026 effective date, giving up roughly $80 million in expected annual revenue. More than 85 Cook County municipalities went the other direction and kept the tax alive locally, so shoppers in Schaumburg, Des Plaines, Palatine, and many other suburbs still pay 1% on groceries. Check the receipt when you cross city lines.
What Groceries Are Now Tax-Free in Chicago
The exemption covers food for human consumption bought to eat at home: fresh produce, meat, poultry, fish, dairy, eggs, bread, cereal, rice, canned goods, frozen meals, and similar staples.3Illinois General Assembly. 35 ILCS 105 3-10 – Rate of Tax The legal test is whether the food is meant to be consumed off the premises where it’s sold.
The store type doesn’t matter. A carton of eggs from a gas station convenience store qualifies the same way it would at a full-sized grocery store. What matters is the item.
What Still Gets Taxed at the Full Rate
Several categories sitting in the grocery aisle are explicitly excluded and remain subject to the general merchandise tax rate, which in Chicago runs above 10% once state and local pieces are combined.4Illinois Department of Revenue. What Are the Retailers Occupation and Use Tax Rates in Illinois
- Alcoholic beverages, including any food product infused with alcohol.
- Soft drinks, meaning non-alcoholic sweetened beverages, unless they contain milk, milk substitutes, or more than 50% fruit or vegetable juice by volume.
- Candy, meaning sweetened preparations in bars, drops, or pieces, unless the product contains flour or requires refrigeration.
- Cannabis-infused food.
- Prepared food sold in a heated state, heated by the seller, or meant for immediate consumption on-site.
The candy and soft drink rules trip people up. A chocolate bar without flour on the ingredient list is candy and takes the full rate; a nearly identical bar containing even a trace of flour is not candy and qualifies for the exemption.5Cornell Law Institute. Illinois Admin Code Title 86 Section 130.310 – Food, Soft Drinks and Candy Ice cream bars and popsicles escape the candy definition because they require refrigeration. A sweetened iced tea is a soft drink; a sweetened coffee drink with milk is not. Unsweetened sparkling water and 100% juice sit on the tax-free side and are also common sources of confusion.
Prepared Food and Restaurant Meals
If the food is ready to eat immediately, the grocery exemption doesn’t apply. A rotisserie chicken from the hot case, a made-to-order deli sandwich, or a hot slice of pizza is prepared food and takes the standard rate.2Illinois General Assembly. 35 ILCS 120 2-10 – Rate of Tax
Restaurants carry an extra layer in Chicago. The city adds a 0.5% restaurant tax on top of regular sales tax for food and beverages sold at restaurants, bars, and other food-service establishments.6City of Chicago. Restaurant Tax (7525) Eating out costs meaningfully more in tax than cooking the same ingredients at home, and that gap widened once the grocery exemption took effect.
Could Chicago Bring the Tax Back?
Yes. As a home-rule municipality under the Illinois Constitution, Chicago has broad authority to levy its own taxes by ordinance.7Illinois General Assembly. Illinois Constitution – Article VII – Section 6 Powers of Home Rule Units The state law caps a local grocery tax at exactly 1%, so the city can’t go higher.1Illinois Department of Revenue. Illinois Grocery Tax Changes Effective January 1, 2026
If the City Council passes an ordinance, the effective date depends on when the certified copy reaches the Illinois Department of Revenue:
- Filed by April 1: effective July 1 of the same year.
- Filed by October 1: effective January 1 of the following year.
With roughly $80 million in annual revenue on the table, this is a live budget question that could resurface at any City Council session. Once adopted, the state Department of Revenue administers the local rate on the city’s behalf.8Illinois Department of Revenue. Local Governments Guide to Tax Allocations – Home Rule Sales Taxes
If You Pay With SNAP
SNAP purchases were already exempt from sales tax under federal law, even before Illinois dropped its 1% grocery tax. Federal rules bar states and localities from charging sales tax on food bought with SNAP benefits at the point of sale. The 2026 change mainly benefits shoppers paying out of pocket; SNAP recipients weren’t paying the 1% to begin with.
For everyone else, the receipt is the quickest check. Qualifying food items should now show zero tax. A charge on ordinary produce, meat, or dairy usually means either a store coding error or an item that falls into one of the excluded categories.