SPRINGFIELD, Ill. — Starting July 1, Illinois residents will get a little bit of relief on taxes on items like school supplies, groceries and gas.
The Illinois Family Relief Plan goes into effect Friday and will suspend the state's 1% sales tax on groceries, the normally scheduled increase of the gas tax and enact a tax holiday on school supplies that will reduce taxes from 6.25% to 1.25% on select items.
Illinois Governor J.B. Pritzker said the plan will provide a total of $1.8 billion in tax relief to residents of the state.
The tax holidays include:
- Groceries: The state’s 1% sales tax on groceries will be suspended July 1 through June 30, 2023. Pritzker's administration says this will save people $400 million.
- Gas: The state’s normally scheduled increase in the motor fuel tax will be delayed from July 1 to January 2023. The increase in January will be determined by inflation. Pritzker's administration says this delay will save people $70 million.
- 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. 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. Pritzker's administration says this will save people $50 million.
Some people in Illinois are already assessing how this tax suspension will play out. At the Millstadt IGA, employees have spent some time figuring out how this will impact customers.
“If you were to spend 100 dollars today you’ll only be saving 10 dollars," said Craig Norrenberns, company director. "Over the course of the year, say you spend 10,000 dollars on groceries, you’ll roughly be saving 100 dollars.”
While some money will be saved, Norrenberns said the plan excludes anything already considered high tax.
“Sugar or alcohol, something that has fruit juice or has higher sugar count like candy, those are still taxed at somewhere between 6 and 7%," he said.
Some customers are still grateful for any chance to save, like Barb Feazel, who has seven grandkids.
"Every little bit helps," she said. "I watch things closer. When I fix dinner, I make sure it’s eaten and nothing gets thrown away.”
While the Illinois relief plan is temporary, Norrenberns said the need for price relief is not.
“I think we’ve all been through a lot, people are looking for help – people need help," he said. "Everybody’s bills are going up, you look at the cost of groceries and fuel and power to turn on heat and cool your homes in the summer? It’s expensive.”
Norrenberns also said there are many ways people can continue to find price relief. His store is starting a rewards program to give back money to customers who shop often. He also said shopping local can make it easier to find prices more suited for you.
The plan also provides property tax rebates of up to $300 for eligible homeowners this year. It also permanently expands the state's earned income credit from 18% to 20% of the federal credit.
For additional information, taxpayers may visit IDOR’s website at tax.illinois.gov. Taxpayer representatives can also provide assistance at 1- 800-732-8866 or 217-782-3336.