The Illinois Legislature has voted to end the 1% grocery sales tax in the state.
The Illinois House had earlier passed the measure by a vote of 77 to 31. The Illinois Senate took up the issue on Sunday and approved it by a vote of 48 to 11. Both State Representative Blaine Wilhour and State Senator Jason Plummer voted No on the measure.
While the elimination of the 1% sales tax on food will give a little benefit to consumers, it will be a bigger blow to communities. The tax revenue from the grocery tax goes straight to local governments and the revenue has no impact on the state budget. The proposal has frustrated local governments because it would take away a source of revenue without any replacement. The City of Vandalia estimated the elimination of the tax would cost the city $170,000 per year.
Under the plan passed by state lawmakers, the grocery tax would be abolished in 2026, but home rule communities would be allowed to pass their own grocery tax. Non-home rule communities—such as Vandalia—would allowed to raise their sales tax rate by .25% annually until it rises by 1 percentage point without going to a referendum.
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