10 states tax groceries, but 4 looking to cut their food levies

^{Photo by Ksenia Chernaya}

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While doing my weekly grocery shopping every Tuesday morning, I tend to encounter the same folks, both H-E-B employees and other customers. This week, though, a woman I hadn’t seen before made an impression.

I dubbed her the Egg Crier, since she posted herself by the store section holding those products. And in her best town crier form, she personally informed every shopper who picked up a carton — and all those even remotely close to the area — of the cost, noting with some exasperation the current high prices.

The dozen Grade A large white eggs I bought cost nearly $6, or according to the Egg Crier “a very expensive $5.97.” She was right. It was a lot, and about $1.50 more than I paid several weeks earlier.

Still, I wanted eggs. And I could afford the higher price. But it also was one of those mornings. So, instead of ignoring her or just nodding as I put the carton in my cart, I responded.

I agreed the cost was high, but pointed out that, unlike some parts of the country, at least there were plenty of eggs available for us suburban Austinites able and willing to pay. Since I had never seen this woman before and didn’t know how deep her aversion to higher egg prices ran, I was relieved when she simply said “that’s true.”

Then she turned to the next shopper who was splurging on a carton of 18 eggs.

Taxes, too, in handful of states: I didn’t add that some places also tax groceries. Inflated egg prices and taxes might have been too much for the Egg Crier!

The good tax news is that most of us don’t have to worry about taxes on most of our grocery purchases. Only 10 states currently collect such levies. They are —

• Alabama at 3%
• Arkansas at 0.125%
• Hawai’i at 4%
• Idaho at 6%
• Illinois at 1%
• Mississippi at 7%
• Missouri at 1.225%
• South Dakota 4.2%
• Tennessee at 4%
• Utah at 3%

Some grocery tax relief: A couple grocery tax states do at least offer consumers some tax relief at filing time.

The Aloha State’s grocery tax technically is a business excise tax, which is passed on to consumers. But qualifying shoppers on the Hawai’ian islands can offset the added amount via a grocery tax credit.

The amount is based on income and family size, and could be as much as $1,100 in some situations. Even better, it’s a refundable tax credit.

Idaho residents can file for $120 tax credit for some of the grocery sales tax they paid, along with a credit for each qualifying dependent. Residents 65 and older get a $140 tax credit. The Gem State grocery credit refund is available even if you’re not required to file a state income tax return.

Idaho lawmakers are considering a proposal to increase the food tax credit to $155 for all, regardless of age.

Looking to ease grocery taxes: There used to be a dozen states (yes, like the standard egg purchase) that taxed groceries. The two that recently dropped off the food tax list are the Sooner and Sunflower States.

Oklahoma’s state sales tax on groceries ended in August 2024, although local sales tax on grocery purchases are still allowed.

After years of phasing out, Kansas’ statewide grocery tax was eliminated on Jan. 1, 2025. Like its neighbor to the south, Kansas lets local jurisdictions decide whether to keep collecting sales tax on groceries.

Illinois will join them next year. A law repealing the Prairie State’s grocery tax is scheduled to take effect Jan. 1, 2026.

Of the remaining food-taxing states, four may soon may cut what they collect on staples. The AP reports that lawmakers in Alabama, Arkansas, Mississippi, and Tennessee have called for grocery-tax reductions.

While lowering or totally eliminating grocery taxes will cost states millions of dollars a year, the political calculations right now seem to be worth it to lawmakers.

“If we’re serious about helping working people get ahead, the best and most impactful way to do that is to take less in taxes and give them some peace of mind when they pay the rent or go to the grocery store,” Alabama Democratic Rep. Adline Clarke said in a news release.

No sales tax at all: Finally, food taxes haven’t been an issue in five states. They don’t collect a statewide sales tax on any products.

The no-sales-tax states are Alaska, Delaware, Montana, New Hampshire, and Oregon. Note, however, that while Alaska shoppers don’t have to worry about a state sales tax on anything, the Final Frontier does allow local governments to assess sales taxes as they see fit.

You also might find these items of interest:

• Added Halloween scare: sales tax on treats
• Inflation + taxes + politics = confusion (2022)
• Tennessee grocery shoppers get 3-month sales tax holiday (2023)
• Grocery prices, inflation and food taxes (2011; yes, it’s been an issue for a long time)

 

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