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Grocery Tax Suspension in Illinois

To help ease the impact of inflation, the State of Illinois will suspend the 1.00% tax on grocery items starting July 1, 2022 through June 30, 2023. This applies to all Illinois residents and there is no income requirement.

Groceries tax at the low rate include food that is to be consumed off the premises where it is sold.

It’s important to note:

  • This suspension does not apply to prepared foods ready to eat (i.e. food at self-service “hot bars”) and other food items taxed at the regular retail rate. 
  • The suspension also does not apply to medical goods taxed at the 1.00% rate. 
  • The RTA and the Metro-East Mass Transit District have not suspended their 0.75% tax which applies to groceries.

Grocery items that are eligible include:

  • Frozen dinners
  • Vegetables
  • Bread
  • Meat & seafood
  • Dairy items
  • Bakery items
  • Cooked-cold or prepared cold foods prepared by the retailer
    • For example, salads or wraps prepared by Jewel, sold at Jewel

The sales for which the grocery tax is suspended will be reported on the new Schedule GT with the ST-1 or ST-2 return.

There is also a notification to be either included on receipts or posted at the point of sale about this suspension. A printable sign will be available on the Department website tax.illinois.gov.

Retailers still need to collect and report all other sales tax as normal, including the 0.75% on groceries where the normal rate is 1.75%.

Contact the Tax and Financial Planning Experts at KRD Today

If you have questions about the grocery tax suspension in Illinois, contact KRD today at 847-240-1040 or contact us online.

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