CHICAGO — As Illinois moves to eliminate its 1% grocery tax beginning January 1, 2026, Chicago is considering continuing the levy — a decision that could generate an estimated $80 million in annual revenue but is also drawing sharp criticism for its impact on low-income families.
Mayor Brandon Johnson’s administration is leaning toward opting in to preserve the tax, joining over 150 municipalities across the state, including Cicero, Berwyn, Des Plaines, and Downers Grove, that have passed similar measures to maintain their share of grocery-related tax collections.
“We’re not creating a grocery tax,” Johnson said at a recent press conference. “We’re just creating a process by which we can collect it.”
How the Grocery Tax Works
The 1% tax applies to food purchased for consumption off-site, such as groceries from supermarkets and corner stores. Food bought with SNAP benefits is exempt, and the tax does not apply to hot or prepared foods consumed on premises.
Under current law, home-rule municipalities — cities with over 25,000 residents — are allowed to retain the tax locally even after the state eliminates it. The city must decide by October 1 whether to continue collecting it after the state stops doing so.
The tax was previously suspended in July 2022 to help residents during pandemic-driven inflation but reinstated in 2023. Its full elimination statewide was announced by Gov. J.B. Pritzker in his 2025 State of the State address and codified in the newly approved fiscal budget.
Supporters Say It’s a Budget Lifeline
According to Mayor Johnson, keeping the tax isn’t about raising new costs — it’s about preserving existing revenue.
“The grocery tax already exists. Chicago residents won’t see an increase in what they’re paying — we’re simply taking over the administration,” Johnson explained.
With the city facing multiple financial demands, including pensions, public safety, and housing investments, officials say the $80 million generated from this tax could be critical to avoiding service cuts or tax hikes elsewhere.
Critics: It’s Regressive and Hurts the Poor
But opponents of the tax, including researchers and community advocates, warn that maintaining it will hurt lower-income households who already struggle with food costs.
“When you raise the grocery tax — a tax on food at home — people shift to restaurant food,” said University of Illinois Professor Elizabeth Power, who cautioned that it could also discourage healthy eating habits and create long-term public health costs.
Anti-hunger groups have argued that even small taxes on essential items like milk, rice, and vegetables add up, especially for families living paycheck to paycheck.
What Happens Next?
Chicago’s City Council will continue deliberating the proposal through the summer. A final decision must be made by October 1 in order for the tax to remain active locally after December 31.
If approved, the city would begin collecting the 1% tax independently of the state, rather than relying on Springfield to handle distributions.
What’s Your Take?
Should Chicago keep the grocery tax to support city services — or eliminate it to ease the cost of living? Drop your thoughts in the comments below and join the discussion at ChicagoSuburbanFamily.com.
