What is significant about retail sales of qualifying food, drugs, and medical appliances?

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In a retail sale, qualifying food, drugs, and medical appliances are taxed at a lower rate of 1% than general merchandise which is taxed at 6.25%. For more information on what food, drug, and medical appliance sales qualify for the reduced, see our Sales and Use Taxes information page. See also 86 Ill. Adm. Code Sections 130.310 and 130.311.

Note: Public Act (P.A.) 102-0700 suspends the state 1% low rate of retailers’ occupation and use tax on retail sales of groceries normally taxed at this rate from July 1, 2022, through June 30, 2023. To learn more about the grocery tax suspension, see 35 ILCS 120/2-8 and the retailer resources information page on the IDOR website.

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