The start of a new school year can be an expensive time for families, but Illinois is stepping in to provide some financial relief. From Friday, August 7 through August 16, 2026 the state will reduce the sales tax on school supplies from 6.25% to 1.25%. This initiative aims to ease the burden on parents and students as they prepare for the upcoming academic year.

Governor JB Pritzker highlighted the importance of this tax holiday during an event in Palatine. “Parents will keep more of their hard-earned dollars while students will get what they need to start the school year off right,” he stated. The program, costing the state $10 million is a small but impactful part of the $55.9 billion budget.

Eligible Items and Savings

The sales tax holiday applies to a wide range of school supplies, including markers, pencils, notebooks, folders, and other classroom essentials. Clothing items, such as shirts, pants, dresses, and shoes, that cost less than $125 will also qualify for the reduced tax rate. Notably, there is no price limit on school supplies, allowing families to maximize their savings. However, it’s important to note that all purchases will still be subject to local sales taxes.

Addressing Economic Challenges

Governor Pritzker attributed the rising costs to President Donald Trump‘s policies, stating that they have increased costs and made life harder for Illinois families. “We can’t control broader inflation in the economy, but there are some things we can do to make life easier,” Pritzker said. This tax holiday is part of a broader effort by his administration to lower costs for Illinoisians, including initiatives to raise the minimum wage, provide food benefits, and forgive medical debt.

The fiscal year 2027 budget includes two tax relief initiatives. In addition to the sales tax holiday, lawmakers suspended the annual increase to the motor fuel tax until January 1, 2027 saving drivers about 1 cent per gallon. Despite these relief measures, the budget also included hundreds of millions of dollars in new taxes, primarily on businesses, with spending increased by less than 1 percent.

Historical Context and Recent Changes

The last time Illinois approved a similar program was in 2026 during Pritzker’s last reelection campaign. This year’s tax holiday comes just days after a sales tax increase in the Chicago area. On August 1, 2026 the sales tax rose by a quarter point in counties served by the Northern Illinois Transit Authority including Cook, Lake, McHenry, DuPage, Kane and Will counties. This increase was approved to help fund public transportation and prevent significant service cuts.

Capitol News Illinois, a nonprofit, nonpartisan news service, distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.