As Illinois prepares to eliminate its 1% statewide grocery tax on January 1, 2026, St. Joseph has joined hundreds of municipalities across the state in implementing a 1% municipal grocery tax to capture the projected lost revenue.
The legislation, House Bill 3144 (Public Act 103-0781), eliminates the state grocery tax that generated roughly $360 million annually for local governments, while simultaneously granting municipalities authority to impose their own 1% tax by ordinance without voter referendum.
Governor JB Pritzker, who signed the legislation in August 2024, framed the repeal as essential tax relief for Illinois families.
“Even with inflation cooling off every dollar counts, so I’m proud we’re doing what we can to make trips to the grocery store a little easier,” said Governor Pritzker. “It’s one more important part of lifting the burden on Illinois families. Establishing a child tax credit, eliminating medical debt, lowering the cost of healthcare, making college more affordable, bringing quality childcare closer to home so moms and dads can go to work — these are not esoteric policy proposals but actually do lift burdens everyday Illinoisans face.”
The 1% tax applies to most grocery items consumed off-premises. The exemption does not extend to alcoholic beverages, candy, soft drinks, cannabis-infused products, or prepared foods, which remain taxed at Illinois’ general 6.25% rate or higher.
Purchases made with Supplemental Nutrition Assistance Program (SNAP) or Women, Infants, and Children (WIC) benefits remain fully exempt from all sales taxes.
However, the state tax’s structure created a fiscal challenge for local governments because those funds went directly to the municipalities, rather than the state. To recapture those funds, 656 municipalities, representing 56.5% of the state’s population, passed ordinances establishing local grocery taxes. Three counties, Washington, Wabash, and Moultrie, have also approved countywide grocery taxes, while cities like Champaign took a different approach by opting to increase their general sales tax instead.
At a June 10, 2025 village board meeting, St. Joseph officials voted to implement the local grocery tax, with Village President Jim Page recommending the measure to avoid a $60,000 annual budget shortfall.
The ordinance passed, ensuring St. Joseph residents will continue paying the same 1% tax on qualifying groceries they’ve been paying for decades. The only difference being that revenue will now flow to village coffers instead of being collected by the state and redistributed.
When Illinois temporarily suspended the grocery tax for one year in 2022, residents saved an estimated $360 million. That translates to roughly $113 annually for a family of four, depending on spending habits and location.
