Carbondale residents will continue paying a 1% tax on groceries despite the elimination of the statewide grocery tax starting Jan. 1, 2026.

The Carbondale City Council approved an ordinance, replacing the state tax with an identical municipal tax on groceries, that will take effect the same day. 

The city tax is expected to generate between $800,000 and $1 million annually, according to Jeff Davis, the finance director for the City of Carbondale.

Illinois Gov. JB Pritzker signed House Bill 3144 in August 2024, repealing Illinois’ 1% statewide grocery tax effective Jan. 1, 2026.

Carbondale is one of 656 Illinois municipalities that enacted local grocery taxes to replace revenue from the eliminated state tax, according to the Illinois Municipal League. That represents approximately 56.5% of municipalities in the state. 

Nearby municipalities, including Du Quoin, Cobden, Herrin and Anna have enacted their local grocery taxes. Marion, Jonesboro, Caterville and Murphysboro have not publicly disclosed their ordinance filings or may still be under review.

Mayor Carolin Harvey said after a City Council meeting on Oct. 28 that the decision maintains existing revenue streams.

“The 1% was already there,” Harvey said. 

She said municipalities with fewer grocery stores may choose not to enact the tax because limited retail activity would generate minimal revenue.

The collection process will remain the same despite the change in legal authority, according to Davis. Under the previous system, the state collected the tax, and the Illinois Department of Revenue distributed 100% of grocery tax revenue back to the municipality where the sale occurred.

“Before, the state would collect the tax, enacted by the state,” Davis said. “It was a state tax.”

Under the new city ordinance, retailers will continue to remit the tax to the State of Illinois, which will act as a collection agent before dispersing funds back to Carbondale.

“Cities’ 1% takes its place,” Davis said. “None of the distribution methods and models are going to change at all.”

The grocery tax revenue is deposited into the city’s general fund, which has revenues of approximately $31 million and expenditures of $31.5 million out of a total city budget of approximately $80.1 million, according to Davis.

Losing the grocery tax revenue would necessitate budget cuts or tax increases elsewhere.

“You either have to reduce your expenditures,” Davis said. “Or you’d have to cut salaries, you’d have to cut employees, you’d have to cut benefits – you could cut anything. You could delay repairs and maintenance on facilities.”

The alternative would be to raise other local taxes to fill the gap, he said.

Francis Murphy, the general manager of Neighborhood Co-op Grocery, said in an email interview that the state tax elimination prompted municipalities to enact their own taxes.

“While I’m generally a big fan of Governor Pritzker, the elimination of the state grocery sales tax feels like a political ploy,” Murphy wrote. “More than half of Illinois municipalities, or approximately 56.5 percent, have voted to impose a local grocery sales tax to compensate for lost revenue.”

Murphy calculated the annual impact on a family with a weekly grocery budget of $300 as $156 per year.

“I don’t think that’s a tangible difference in most families’ budgets,” Murphy said.

The 1% tax will apply to food for human consumption sold off premises, excluding alcohol, soft drinks, candy and foods prepared for immediate consumption. The tax is collected at the point of sale and appears as a separate line item on receipts.

For a $100 grocery purchase, the tax adds $1 to the total cost.

News reporter Trevor John can be reached at [email protected]

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