Illinois to eliminate grocery tax

Illinois Governor JB Pritzker has signed a bill eliminating the state's 1% grocery tax, effective January 1, 2026, transferring tax authority to local governments. Local municipalities can choose to impose their own grocery tax without requiring voter approval, but many face potential budget shortfalls as they will lose the revenue previously generated by the state tax. Pritzker argues this measure will alleviate financial burdens on families, particularly in light of inflation, noting that residents saved $360 million during a previous suspension of the tax in 2022. However, critics, including State Senator Don DeWitte, warn that this shift simply offloads tax responsibilities to local governments, potentially leading to higher local taxes. Some local leaders express concern over the impact on their budgets, with Algonquin Village President noting a potential annual loss of $2 million. The controversy continues as local authorities assess their options moving forward.