New grocery tax coming to Chicago and suburbs; here’s what you need to know Chicago’s new grocery tax

Several Chicago suburbs are set to implement a new grocery tax. The tax will affect many residents who shop for everyday food items. Chicago Mayor Brandon Johnson officially announced the city’s plan to introduce a new grocery tax on June 3, 2025, to address the city’s growing budget deficit.

The new grocery tax will generally apply a 1 per cent sales tax on most food items purchased at grocery stores. This includes staples like bread, milk, fruits, vegetables, and packaged goods.


However, depending on local regulations, some items, such as prepared foods and restaurant meals, may be taxed differently or excluded. The tax is designed to cover everyday groceries that residents regularly buy, making it one of the few city sales taxes to specifically target food purchases.

Expected to take effect later this year, it will generate additional revenue to support essential public services amid rising costs and economic challenges, the government believes.

Alongside Chicago, several nearby suburbs, including Evanston and Oak Park, are also moving forward with similar grocery tax measures. These local governments face similar financial pressures and see the tax as a critical step to stabilize their budgets and maintain key community programs.

Why are they doing it?

Chicago and nearby suburbs like Evanston and Oak Park have significant budget shortfalls. Rising costs for public services and infrastructure have strained local finances. Leaders say new revenue sources are necessary to keep essential services running.

Chicago Mayor Brandon Johnson has cited the grocery tax as a way to help close the city’s budget gap. The mayor’s office estimates the tax could generate millions in additional revenue, which would support vital programs such as public safety, schools, and community services.

Officials argue the tax will diversify income streams instead of relying heavily on property taxes or fees. They believe this can help balance budgets without drastic spending cuts.

What are the benefits?

The extra funds from the grocery tax could stabilize local budgets. This may prevent reductions in public safety and social programs that many residents depend on. It could also maintain investments in infrastructure projects.

According to city officials, grocery tax revenues would directly benefit the communities that pay the tax. For example, Chicago officials say the money will help fund violence prevention programs and expand youth services.

In suburban areas, the revenue may support local schools and public works. Leaders stress that a stable budget enables better long-term planning and services for residents.

What's for you?

The grocery tax means shoppers will pay more for food. This has raised concerns, especially among low- and middle-income families facing high living costs.

Critics say the tax is regressive. It hits all consumers regardless of income. For many households, even a small percentage increase on groceries adds up quickly.

Some community groups worry the tax could worsen food insecurity. They urge officials to consider exemptions or relief programs for vulnerable populations.

Residents should expect small increases in grocery bills. City officials encourage the public to view the tax as a necessary step for long-term community support by saying the tax rate will be modest, often around 1 per cent. They also highlight that the revenue benefits could improve programs that help needy families.