Illinois is making significant changes to its sales and use tax laws, especially concerning food items. These changes are set to reshape how food is taxed in the state. Here’s what you need to know:
Elimination of State Sales and Use Tax on Food
On August 5th, Governor J.B. Pritzker signed into law HB 3144. Starting January 1, 2026, Illinois will no longer impose state sales and use tax on food for human consumption that is intended to be consumed off-premises. However, certain items will not be exempt:
- Alcoholic beverages
- Food consisting of or infused with adult-use cannabis
- Soft drinks
- Candy
- Food prepared for immediate consumption
Local Grocery Taxes
Beginning January 1, 2026, counties and municipalities in Illinois can impose their own local grocery tax of up to 1%, these taxes are administered and enforced by the Illinois Department of Revenue.
Specific Provisions for Cook County
In Cook County, there will be specific tax rates applied to food sales:
- Regional Transportation Authority Retailers’ Occupation Tax: A tax rate of 1.25% will apply to sales of food for human consumption that is intended to be consumed off-premises, excluding alcoholic beverages, cannabis-infused food, soft drinks, candy, and food prepared for immediate consumption.
- Service Occupation Tax: A tax rate of 1.25% will apply to food prepared for immediate consumption and transferred incident to a sale of service by certain licensed entities.
Please contact the DHJJ State and Local Tax Team at 630-420-1360 with any questions.
