Grocery tax to return July 1; Illinois to be one of 13 states to have grocery tax

Illinois is reinstating the state grocery tax on July 1 after an election-year suspension. Illinois will again become an outlier by taxing food at the supermarket: 37 states don’t tax groceries at all.

Among the 10 most populous states, Illinois is the only one with a grocery tax.

Among the 13 states that tax groceries, Hawaii, Idaho, Kansas and Oklahoma all offer a credit or rebate to offset costs for low-income households.

Gov. J.B. Pritzker suspended the 1% tax in his election-year budget, along with delaying the state gas tax hike for six months. The automatic gas tax hike returned Jan. 1 and another hits July 1, for a total increase of 6.2 cents per gallon in 2023.

Inflation was Pritzker’s primary reason for the temporary relief, but food prices are still on the rise. From April 2022 to April 2023, the consumer price index for groceries rose 7.1%. They’re expected to grow by another 4.5-8% by the end of 2023.

Price growth in 2023 will still be well above ordinary growth, according to Steve Morris from the U.S. Government Accountability Office

“Prices are expected to grow more slowly in 2023 than they did in 2022. But it’s still going to grow more than the historic annual average of 2%,” Morris said. “When you look at the forecast for this year’s prices, they’re predicted to increase anywhere from 5 to 10%, and probably settle around 8%. So, they’re still going to be really high.”