Will dietary supplements that don't make medicinal claims still be taxed at a reduced rate after Illinois eliminates its 1% state grocery tax on January 1, 2026?

Plain-English summary

Illinois has long taxed dietary supplements, vitamins, and meal-replacement drinks at a reduced 1% rate as "food," as long as their labels don't make medicinal claims -- a business asked whether that treatment survives a major change taking effect January 1, 2026: the elimination of the state's 1% grocery tax.

The Department's answer walks through what's actually changing. Illinois has historically taxed qualifying food, drugs, medicines, medical appliances, and Class III medical devices at a reduced 1% state rate, with ordinary merchandise taxed at 6.25%. Beginning January 1, 2026, Public Act 103-781 eliminates the STATE 1% rate specifically for grocery-type food consumed off the premises where it's sold (carving out alcohol, cannabis-infused food, soft drinks, and food prepared for immediate consumption, which stay taxed differently) -- meaning qualifying groceries drop to a 0% STATE rate. But that's not the whole story: two new laws, the Municipal Grocery Occupation Tax Law and the County Grocery Occupation Tax Law, let individual municipalities and counties adopt their OWN local 1% grocery tax by ordinance, also starting January 1, 2026. Critically, "groceries" under these new local laws is defined to include the SAME items that qualified for the old state 1% rate -- including dietary supplements, vitamins, and meal-replacement drinks that don't make medicinal claims.

So the practical answer depends on geography: in a place where the local municipality or county has adopted the new local grocery tax, the net rate on a qualifying supplement stays essentially the same as before (1%, just now reported to a local jurisdiction instead of the state, on a different line of the sales tax return). In a place with no local grocery tax ordinance, that same item becomes untaxed at the point of sale (aside from certain regional transit-district taxes in the Chicago area and Metro-East that continue regardless). None of this touches supplements that DO make a medicinal claim on their label -- those remain classified as "medicine or drug" and stay taxed at the 1% rate that applies to medicines generally, since that separate 1% isn't being eliminated.

What this means for you

Retailers of vitamins, supplements, and meal-replacement products

Don't assume your product's tax rate is changing on January 1, 2026 just because the "grocery tax" is in the news -- if your product doesn't make a medicinal claim, it's still classified as food/groceries, and its actual tax rate after that date depends on whether YOUR specific city or county has adopted the new local grocery tax ordinance.

Multi-location retailers

Track grocery-tax adoption location by location. The same supplement sold from two different stores could be taxed differently after January 1, 2026 -- 1% in a jurisdiction that adopted the local grocery tax, 0% (aside from RTA/MED-area taxes) in one that didn't.

Accountants and tax professionals

Watch Form ST-1 reporting mechanics: sales in a jurisdiction WITH a local grocery tax report on a different return line than before, while sales in a jurisdiction WITHOUT one still get reported as gross grocery receipts but then deducted on Schedule A when calculating taxable receipts. Check PIO-115 (Tax Rate Information for Retail Sales of Food and Medicine) for the underlying detail.

Common questions

Q: Are dietary supplements still taxed at 1% after January 1, 2026?
A: It depends on location. If your supplement doesn't make a medicinal claim, it's classified as food/groceries -- taxed around 1% only where the local county or municipality has adopted its own new grocery tax, and otherwise untaxed at the state/local retailers' occupation tax level.

Q: Is the state grocery tax being eliminated everywhere?
A: The STATE's 1% grocery tax is eliminated statewide effective January 1, 2026. What replaces it is optional -- counties and municipalities may adopt their own local 1% grocery tax, but aren't required to.

Q: Does this change affect supplements that make medicinal claims?
A: No. A supplement whose label makes a medicinal claim is classified as a "medicine or drug" and stays taxed at the separate 1% medicine rate, which this grocery-tax change doesn't touch.

Q: What is exempt no matter what, even under the new grocery classification?
A: Alcoholic beverages, cannabis-infused food, soft drinks, and food prepared for immediate consumption were never part of the reduced-rate grocery category and aren't affected by this change in the same way.

Citations and references

Statutes:

• 35 ILCS 115/3-5(37), 120/2-5(49), 105/3-5(44) (grocery exemption effective January 1, 2026, added by P.A. 103-781)
• 35 ILCS 120/2-10 (State grocery tax rate provisions)
• 55 ILCS 5/5-1006.9 (County Grocery Occupation Tax Law)
• 65 ILCS 5/8-11-24 (Municipal Grocery Occupation Tax Law)

Regulations:

• 86 Ill. Adm. Code 130.310 (definition of "food"; 1% reduced rate)
• 86 Ill. Adm. Code 130.311(c) (definition of "medicine or drug")

Source

• Landing page: Illinois 2025 Sales Tax Letter Rulings
• Original PDF: ST25-0065-GIL.pdf

Original ruling text

ST 25-0065-GIL 12/05/2025 FOOD AND MEDICINE
This letter discusses the tax rates applicable to sales of food and medicine before
elimination of the State 1% grocery tax and after implementation of county and
municipal 1% grocery taxes. 35 ILCS 120/2-10; 55 ILCS 5/5-1006.9; 65 ILCS 5/8-1124; 86 Ill. Adm. Code 130.310. (This is a GIL).
December 5, 2025
NAME
COMPANY
EMAIL
Dear NAME:
This letter is in response to your letter dated October 28, 2025, in which you
requested information. The Department issues two types of letter rulings. Private Letter
Rulings (“PLRs”) are issued by the Department in response to specific taxpayer inquiries
concerning the application of a tax statute or rule to a particular fact situation. A PLR is
binding on the Department, but only as to the taxpayer who is the subject of the request for
ruling and only to the extent the facts recited in the PLR are correct and complete. Persons
seeking PLRs must comply with the procedures for PLRs found in the Department’s
regulations at 2 Ill. Adm. Code 1200.110. The purpose of a General Information Letter (“GIL”)
is to direct taxpayers to Department regulations or other sources of information regarding
the topic about which they have inquired. A GIL is not a statement of Department policy and
is not binding on the Department. See 2 Ill. Adm. Code 1200.120. You may access our
website at https://tax.illinois.gov/ to review regulations, letter rulings and other types of
information relevant to your inquiry.
The nature of your inquiry and the information you have provided require that we
respond with a GIL. In your letter you have stated and made inquiry as follows:
I am writing to seek clarification regarding the taxability of dietary
supplements in Illinois, effective January 1, 2026.
Currently, under the state’s general regulations, dietary supplements that
meet Illinois’ definition of “food” are subject to the reduced 1% sales tax
rate. Per the attached June 4, 2024 letter ruling, “Since not many vitamins or
food supplements or meal replacement drink mixes are likely to make
medicinal claims, they would not qualify as a medicine or drug; however, such
items would be considered to be food subject to 86 Ill. Adm. Code 130.310.”

COMPANY/NAME
Page 2
December 5, 2025
Could you please confirm whether this 1% reduced rate treatment will
continue after January 1, 2026, or if any changes are planned that would affect
the taxability of dietary supplements?
DEPARTMENT’S RESPONSE:
The Retailers’ Occupation Tax Act (“Act”) imposes two State tax rates. Qualifying
food, drugs, medicines, medical appliances, and Class III medical devices, for human use,
are taxed at a lower State rate of 1%, plus any applicable local taxes. Items that do not
qualify for the low rate of tax are taxed at the general merchandise rate of 6.25%, plus
applicable local taxes. However, beginning on January 1, 2026, food for human consumption
that is to be consumed off the premises where it is sold (other than alcoholic beverages,
food consisting of or infused with adult use cannabis, soft drinks, and food that has been
prepared for immediate consumption) will be exempt from State Occupation and Use taxes.
See 35 ILCS 115/3-5(37), 35 ILCS 120/2-5(49), and 35 ILCS 105/3-5(44), as amended by P.A.
103-781.
The Department’s rule defines “food” as any solid, liquid, powder or item intended
by the seller primarily for human internal consumption, whether simple, compound or
mixed, including foods such as condiments, spices, seasonings, vitamins, bottled water
and ice. 86 Ill. Adm. Code 130.310(c)(1). A “medicine or drug” is “any pill, potion, salve, or
other preparation intended by the manufacturer for human use and which purports on the
label to have medicinal qualities.” 86 Ill. Adm. Code 130.311(c). If vitamins, food
supplements or meal replacement drink mixes are for human use and purport on the label
to have medicinal qualities, such items are considered to be drugs and are taxed at the low
rate of 1%. Since not many vitamins, food supplements or meal replacement drink mixes
are likely to make medicinal claims, they would not qualify as a medicine or drug; however,
such items would be food subject to the 1% rate until January 1, 2026. 86 Ill. Adm. Code
130.310.
Public Act 103-781 eliminated the 1% State tax on qualifying food effective January
1, 2026, but the Regional Transportation Authority (RTA) and Metro-East Mass Transit District
(MED) taxes on qualifying food remain in effect. The new Municipal Grocery Occupation Tax
Law (65 ILCS 5/8-11-24) and County Grocery Occupation Tax Law (55 ILCS 5/5-1006.9)
authorizes municipalities and counties to impose a local grocery tax at the rate of 1% by
ordinance, to take effect beginning January 1, 2026. “Groceries” under these new laws
includes the same food items that qualify for the State 1% rate prior to January 1, 2026,
including dietary supplements that do not make medicinal claims. See 55 ILCS 5/51006.9(h) and 65 ILCS 5/8-11-24(h).

COMPANY/NAME
Page 3
December 5, 2025
For grocery sales, including destination-based sales, at locations where a municipal
or county grocery tax has been imposed beginning January 1, 2026, the tax rate will be the
same as it was when the 1% State rate was in effect prior to January 1, 2026. The only change
beginning January 1, 2026, will be the line used to report grocery receipts on Form ST-1.
However, for groceries sold at locations outside of the RTA and MED in municipalities or
counties without a grocery tax, retailers will continue to report gross receipts from grocery
sales but deduct them on Schedule A when determining taxable receipts. For more
information, please see PIO-115, Tax Rate Information for Retail Sales of Food and Medicine.
I hope this information is helpful. If you require additional information, please visit
our website at https://tax.illinois.gov/ or contact the Department’s Taxpayer Information
Division at 800-732-8866.
Very truly yours,

Edward Mroczkowski
Associate Counsel
EM:slc