Illinois, Oklahoma Take Steps to Eliminate Grocery Tax

During his Feb. 21 budget address, Illinois Gov. J.B. Pritzker proposed permanently ending the state’s 1% grocery tax. 

Consumers across the country are still contending with high prices at the grocery store, as the latest CPI data shows that food at home rose 0.4% last month, following several months of slight increases in the 0.2% range. Four of the six groups within grocery experienced higher inflation in January, including nonalcoholic beverages (up 1.2%), fruits and vegetables (up 0.4%), dairy and related products (up 0.2%) and “other” food at home such as sugar and sweets, fats, and oils (up 0.6%).  

Illinois is one of 13 states that have a grocery tax. The other states are Oklahoma, Alabama, Arkansas, Hawaii, Idaho, Kansas, Mississippi, Missouri, South Dakota, Tennessee, Utah and Virginia

 “It's one more regressive tax we just don't need,” Pritzker said. “If it reduces inflation for families from 4% to 3%, even if it only puts a few hundred bucks back in families' pockets, it's the right thing to do." 

The measure would have to go before state lawmakers.

Illinois temporarily suspended its grocery tax in mid-2022 during the COVID-19 pandemic. The tax was reinstated on July 1, 2023.

Meanwhile, legislators at the Oklahoma State Capitol passed House Bill 1955 on Feb. 22 to eliminate that state's grocery tax, which comes in 4.5%. 

"This is a truly historic day," said House Speaker Charles McCall, R-Atoka. "With the passage of House Bill 1955, the legislature has managed to give Oklahomans the largest single-year tax cut in state history, returning $411 million to our citizens at a time when they need it the most."

The bill is now headed to Oklahoma Gov. Kevin Stitt’s desk for approval.