Illinois is Looking to Lower Your Grocery Bills, But Not by Much

Illinois Governor J.B. Pritzker has announced a bold proposal during his recent budget address in Springfield: the permanent repeal of the state's 1% tax on groceries. This tax, temporarily suspended during the COVID-19 pandemic, is deemed regressive by the governor, disproportionately burdening families already struggling with increasing prices and economic challenges. Pritzker sees repealing this tax as a crucial measure to alleviate financial pressure on households, even if it only translates to a few hundred dollars saved.

The temporary suspension of the grocery tax, initially part of Pritzker's Fiscal Year 2022 budget, was estimated to save shoppers up to $400 million. However, for this repeal to become permanent, it must gain approval from lawmakers. There's uncertainty surrounding whether state officials would prevent local governments from imposing their own sales taxes on grocery items if the repeal goes through.

Illinois is among the 15 states that currently impose some form of sales tax on groceries, with specifics usually targeting items intended for off-premises consumption. The proposal aligns with a growing trend among states to eliminate or reduce sales taxes on groceries, recognizing their disproportionate impact on food-insecure communities.

A study from 2021 reveals a stark reality: approximately one-third of all U.S. counties do not exempt grocery foods from general sales tax. This means that the lowest-income families in those areas are particularly vulnerable to food insecurity. By repealing the grocery tax, Pritzker aims to address this disparity and provide much-needed financial relief to those who need it most.

In addition to the grocery tax repeal, Pritzker has also outlined various other proposals in his budget address, including an expanded child tax credit and initiatives to alleviate medical debt for hundreds of thousands of Illinoisans. Basically, what it comes down to is that a $100 grocery bill will now cost just a dollar less. However, add that up over a years' time and you might just pocket $100.