Illinois grocery, gas bills could soon change as taxes set to soon rise. What to expect

Illinois residents could soon be paying more at the pump and at the grocery store as two tax increases are set to take effect next month.

Beginning July 1, the suspension of the state's grocery tax will end and an increase in the gas tax will take effect for the second time this year.

Here's what to know about each:

Illinois Grocery Tax

Last year, Illinois' 1% grocery tax was suspended as part of a 2022 $46.5 billion state budget plan aimed at providing relief to families struggling with rising costs of goods and inflation. Officials said the extension was predicted to save taxpayers upwards to $400 million through the fiscal year.

The tax was suspended for 12 months on items that included “food for human consumption that is to be consumed off the premises where it is sold.” Alcoholic beverages, soft drinks, candy and food prepared for immediate consumption were not included in the grocery tax suspension.

According to state documents, the final day of the tax holiday is June 30, 2023.

According to the Illinois Department of Revenue, for a grocery bill of $145.29, a 1% tax would add $1.45.

Illinois Gas Tax

Also under the state’s 2023 fiscal year budget, a mandatory increase in the gas tax that was tied to inflation was delayed by six months last year.

That increase, which took effect on Jan. 1, saw the tax rise to 8.2%, meaning the rate for Illinois motorists climbed by roughly 3.2 cents per gallon earlier this year, bringing the state’s total fuel tax on unleaded gasoline to 42.4 cents per gallon.

But the annual inflation-based increase in the state’s gas tax goes into effect on July 1 each year because of the Rebuild Illinois infrastructure bill, which passed the General Assembly in 2019. Prior to that, the state’s gas tax had been locked at 19 cents per gallon for nearly 20 years.

Under the terms of the state’s 2023 fiscal year budget, the tax increase for fiscal year 2024 will still go into effect, meaning that motorists could see a second fuel tax increase this year.

Here's a breakdown from the state:

From January 1, 2023, through June 30, 2023, the rates are as follows:

• gasoline/gasohol – $0.423 per gallon
• diesel fuel – $0.498 per gallon
• liquefied petroleum gas (LPG) – $0.498 per gallon¹
• liquefied natural gas (LNG) – $0.498 per gallon²
• compressed natural gas (CNG) – $0.423 per gallon³

From July 1, 2023, through June 30, 2024, the rates are as follows:

• gasoline/gasohol – $0.454 per gallon
• diesel fuel – $0.529 per gallon
• liquefied petroleum gas (LPG) – $0.529 per gallon¹
• liquefied natural gas (LNG) – $0.529 per gallon²
• compressed natural gas (CNG) – $0.454 per gallon³