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Oklahoma’s grocery sales tax ends in late August

July 7, 2024

That will leave a dozen states still taxing at least some food bought by grocery shoppers.

Fresh peppers produce section of my local HEB grocery_cropped

My favorite section of my local H-E-B grocery. (Photo by Kay Bell)

When you loaded up your grocery cart for your July 4th spread, you probably weren’t thinking about taxes. That’s because most of us live in states that, for the most part, don’t tax food.

That’s not the case in 13 states. Those jurisdictions do tack a few percentage points of sales tax on most foodstuffs.

But one of those states will join the no-grocery-tax ranks later this summer.

In late August, Oklahoma’s state grocery tax of 4.5 percent will be eliminated.

Local taxes continue: Some Sooner State shoppers, however, will still pay. The new law doesn’t affect local sales tax on groceries. But it does prohibit cities and counties from increasing the tax until July 1, 2025.

And ready-to-eat items, such as pre-made sandwiches, pizza slices, and fruit bowls sold in many grocery stores, still will be subject to the state’s sales tax.

Still, Oklahoma shoppers will find their basic groceries and ingredients that make up most food shopping trips will no longer be taxed at the state level starting in late August.

No-food-tax timing: The exact tax-free date should be Aug. 28, since the law’s language calls for it to take effect 90 days after the Oklahoma legislature’s 2024 session ended. OK lawmakers adjourned on May 30.

In signing the bill on Feb. 27, Gov. Kevin Stitt noted that the move to exempt food from the state’s sales tax had been years in the making. He cited the 2021 inflation surge as motivation to get the bipartisan bill into law.

“To us in leadership, the grocery tax was one of the most regressive taxes that we had,” Stitt said. “It affected people on the lower income bracket much more than people that made a lot of money.”

It also will reduce Oklahoma’s revenue by an estimated $418 million a year. But that’s a concern for another, non-election year.

States still taxing food: Once Oklahoma’s sales tax on food ends, there will be only a dozen states that still collect such levies.

Those 12 states, listed below, are this weekend’s By the Numbers figure.

Alabama. The state’s food tax recently dropped from 4 percent to 3 percent, and may be cut to 2 percent on Sept. 1 if there is enough growth in the state’s Education Trust Fund. Local jurisdictions and municipalities can still assess their own food tax on top of the Yellowhammer State’s rate.

Arkansas. A 0.125 percent tax on food is collected from the Natural State’s grocery shoppers. However, the amount could be more depending on where you shop, since city or county sales taxes also apply.

Hawai'i. The Aloha State doesn’t have a sales tax, but it does charge businesses an excise tax of between 4 and 4.5 percent, which retailers pass on to consumers. Qualifying shoppers can offset the added amount via a grocery tax credit. Even better, it’s a refundable tax credit.

Idaho. Food is taxed at the Gem State’s 6 percent rate. However, Idaho does provide resident shoppers a $120 tax credit for some of the grocery sales tax they paid, along with the same credit amount for each qualifying dependent. Residents 65 and older get a $140  tax credit.

Illinois. The Prairie State charges a 1 percent tax on groceries. The tax had been suspended from July 1, 2022, through June 30, 2023, but was reinstated in July 2023.

Kansas. The Sunflower State’s grocery tax stands at 2 percent for 2024. It has been phasing down the last few years, and is set for elimination on Jan. 1, 2025. However, local sales tax on grocery purchases will still apply.

Mississippi. The Magnolia State’s 7 percent sales tax rate applies to food purchases.

Missouri. Show Me State grocery shoppers are taxed at 1.225 percent on their food purchases. Local taxes can also apply.

South Dakota. The Mount Rushmore State’s 4.5 percent sales tax applies to groceries at the same rate.

Tennessee. Groceries are taxed at 4 percent by the Volunteer State’s tax department. Local sales taxes may also apply.

Utah. The Beehive State has a 3 percent tax on food. That includes a 1.75 percent state tax, 1 percent local option and 0.25 percent county option. Voters will decide in November whether to keep or eliminate the state’s food tax.

Virginia. A 1 percent sales tax is applied in the Old Dominion on most grocery staples and cold-prepared foods packaged for home consumption.

If you live in one of these 12 grocery-taxing states, shop wisely. And maybe contact your local lawmakers about joining the rest of us who are shopping without having to budget extra for our food.

You also might find these items of interest:

 

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TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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