Illinois suspends grocery tax, delays gas tax increase July 1; property tax relief — what to know

Some big changes will be taking effect Friday across Illinois to ease the financial burden for people across the state.

The Illinois Family Relief Plan will suspend the grocery tax and delay a gas tax increase. It will also provide relief to residents on their property taxes, and to parents buying school supplies for their children.

"We are sending $1.8 billion in tax relief to Illinois families – and we are doing that because Democrats balanced the budget, eliminated the bill backlog, and state government is now running a surplus," Gov. JB Pritzker said in a statement.

The initiative is part of Gov. Pritzker's plan to combat record inflation.


"Amid historic rates of inflation, the people of our state deserve to know that they are not on their own. We are with them," Lt. Governor Juliana Stratton said.

Grocery shoppers will not have to pay the state's one-percent sales tax through June 30, 2023. Illinois' scheduled gas tax hike, which was set to take effect Friday, will be suspended until January 2023 — a move Pritzker said will save Illinois drivers $70 million.

Back-to-school shoppers can save five percent on state sales tax if they shop for school supplies between August 5th and 14th — and some households will be eligible for property tax rebates of up to $300.

"If you are a working family, you're going to benefit from all of this effort," said Rep. Will Davis (D-30th). "We know times are tough. Groceries are going up. Gas is going up. Everything is costing more these days."

Pritzker says the one-year grocery tax suspension will save Illinoisans $400 million, and any household with a combined income of less than $500,000 will see a property tax rebate of at least $50.

"Starting tomorrow, every Illinoisan will get tax relief on the essentials: gas, groceries and your home," Pritzker said.

Despite the temporary relief, Pritzker doubled Illinois' gas tax in 2019 — from 19 to 38 cents per gallon — and built in yearly hikes which automatically kick in each year. While this year's gas tax hike is delayed, it also means there will be two gas tax hikes in 2023.

Here's what Illinoisans need to know heading into tomorrow:

  • Groceries: The state’s 1% sales tax on groceries will be suspended July 1 through June 30, 2023.
  • Gas: The state’s normally scheduled increase in the motor fuel tax will be delayed from July 1 to January 2023.
  • School supplies: Sales taxes for qualified clothing and school-related items will be reduced from 6.25% to 1.25% for a 10-day window from August 5 to 14, saving consumers $50 million. Items include qualifying clothing and footwear with a retail selling price of less than $125 per item. Eligible school supplies are not subject to the $125 threshold.

In addition, eligible Illinois homeowners will be provided with property tax rebates in the same amount of their property tax credit that they qualified for on their 2021 tax returns — up to a maximum of $300.

"The rebate is not allowed if a taxpayer’s adjusted gross income for the taxable year exceeds $500,000 for returns with a federal filing status of married filing jointly, or $250,000 for all other returns," according to information from the state.

Those who made less than $200K in 2021 will receive $50 income tax rebates, and couples who filed jointly with incomes under $400K will receive $100.

"Tax filers will also receive $100 per dependent they claimed on their 2021 taxes, up to three dependents," the state said. "Income and property tax rebates will be automatically issued to all of the estimated 6.2 million taxpayers who qualify under the Family Relief Plan based on information included in their submitted 2021 tax returns."

Illinois will begin distributing the rebates Sept. 12, and it will take around eight weeks for those eligible to receive them.

Those who did not file their 2021 income tax returns but still want to claim the rebates can do so HERE.

Rebates will be received by residents the same way they received their tax returns.; ex: direct deposit, checks, etc.

For additional information or assistance, visit HERE — or call 800-732-8866 or 217-782-3336.