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The typical household of 4 within the U.S. reportedly spends greater than $1,100 a month on groceries, and so they’re not being extravagant. Meals prices elevated about 2.5% in 2024 from the earlier yr.
A household’s grocery payments usually finish there, however many states and jurisdictions tack a gross sales tax on these purchases as effectively. Their tax charges can fluctuate month-to-month as a result of laws to eradicate, cut back, or alter them is steadily proposed.
Key Takeaways
- Most states draw a dividing line between groceries and restaurant meals and don’t tax meals bought for house consumption.
- Quite a few states have launched laws to scale back or eradicate meals taxes, however some efforts have failed.
- A number of states don’t tax meals on the state degree however enable their counties and native jurisdictions to take action.
- At the least one state taxes retailers as a substitute of customers.
States That Tax(ed) Meals
There are meals taxes…after which there are meals taxes. Most states that don’t impose them draw a dividing line between meals bought at a grocery retailer for house preparation and meals consumed at a restaurant or from road distributors. The key phrases that seem of their laws are sometimes “unprepared meals” or “meals supposed for house consumption.” These meals dodge the tax.
These states charged a gross sales tax on grocery retailer meals on the shut of 2024, however laws is pending in some. They’re listed so as from the most affordable tax to the most costly.
Kansas
Kansas started phasing out its meals tax in 2023, however residents and buyers nonetheless needed to pay a 2% tax in 2024, down from 4% in 2023. The state eradicated the tax totally as of Jan. 1, 2025, making it probably the most tax-friendly meals state on our checklist heading into 2025 as a result of it’s develop into one which doesn’t levy a meals tax in any respect.
Arkansas
Arkansas is the second kindest state. The meals tax charge in Arkansas is simply 0.125% as of 2025. A legislative bid tried to take away the tax totally in 2024, however the measure failed. Governor Sarah Huckabee Sanders vowed to strive once more to eradicate it in her State of the State tackle in January 2025.
Illinois
The meals tax in Illinois has been on-again and off-again in recent times. It was eradicated from July 1, 2022, by June 30, 2023, however was reinstated at 1%. Additional laws is ready to eradicate it totally as of January 2026.
Virginia
Virginia’s meals tax can be 1% and it doesn’t apply to all groceries. Most cold-prepared meals and staples are taxed, nevertheless.
Missouri
Missouri is available in simply behind Illinois and Virginia, with a charge of 1.225%. It is a 3% discount from 2023, so the state is headed in the fitting route for dollar-conscious buyers.
Utah
Utah’s state tax charge on groceries is 1.75%. A doable elimination of the tax was set to be determined by voters within the November 2024 election, however a rally by lawmakers prevented the problem from showing on the poll.
Alabama
Alabama is one other state the place the meals tax has been in flux in recent times. It was reduce from 4% to three% in early 2024 after which was projected to be diminished an extra 1% in September 2024, however was in the end rejected. Based on Alabama’s Division of Income, “If there may be enough progress within the state Schooling Belief Fund for the subsequent fiscal yr, then the state charge will probably be diminished on September 1, 2025.”
Tennessee
Tennessee imposes a 4% tax charge on meals purchases. Laws was launched in 2024 to eradicate the tax, however the invoice was not handed. Legislators have refined its phrases and plan to strive once more in 2025.
South Dakota
Most groceries in South Dakota are taxed at a charge of 4.2% by not less than 2027. Repealing the tax was put to a vote in November 2024, and voters overwhelmingly rejected the choice. South Dakota doesn’t have a separate meals tax however applies its total gross sales tax to meals purchases.
Oklahoma
Oklahoma’s grocery tax was up there at 4.5%, however the state eradicated this tax in 2024 for meals and elements gross sales. Ready meals continues to be topic to the tax.
Idaho
This state seems on the high of the most costly checklist, with a tax charge of 6%. Idaho does, nevertheless, have a grocery tax credit score that offsets the gross sales tax paid on groceries all year long. It averages $120 for many residents.
Mississippi
Mississippi costs a gross sales tax of seven%, which applies to meals purchases. This charge makes it the unkindest of all states with regards to taxing grocery objects. In January 2025, the Mississippi Home handed a invoice to chop the grocery tax over the subsequent decade. As of writing, it is with the Senate for consideration.
Different Meals Taxes
Many of those tax charges include a giant catch: They’re state taxes. Some states don’t prohibit counties and municipalities from piling their very own meals taxes on high of these charged on the state degree, which might tremendously enhance meals prices. They embrace:
- Alabama: Native jurisdictions
- Arkansas: Metropolis and county taxes
- Idaho: Native jurisdictions
- Kansas: Native jurisdictions
- Missouri: Native jurisdictions
- Oklahoma: Municipalities
- Tennessee: Native jurisdictions
- Utah: 1% native and .25% county
Native jurisdictions in Illinois have retained the fitting to levy the eradicated state tax in the event that they select to take action.
Hawaii doesn’t cost customers a meals tax, nevertheless it did cost retailers at a charge from 4% to 4.5% as of 2024, and so they could move the burden on to their prospects with an extra surcharge of as much as .5%.
Groceries vs. Restaurant Fare
A distinction have to be made between “meals” and “groceries.” States that exempt groceries from taxation don’t usually exempt restaurant meals and different let’s-eat-out-tonight meals. Tennessee’s charge doesn’t cowl restaurant and ready meals, nor does Oklahoma’s, which excludes dietary dietary supplements.
Utah permits restaurant diners to request a separate receipt for any unprepared meals purchases they make on the location so that they’re not charged the tax.
States That Supply Assist
Just a few states acknowledge that paying a tax on that loaf of sandwich bread can put a pinch on some family budgets and enhance meals insecurity. Hawaii presents a grocery tax credit score to low-income taxpayers to take among the chunk out of outlets passing on their very own tax burdens to customers.
Low-income earners are eligible for a $120 grocery tax refund in Idaho. Every of a household’s dependents additionally entitles them to $120. Residents who’re age 65 or older get $140.
Tennessee sometimes presents meals gross sales tax “holidays,” abating the tax for brief durations.
The Backside Line
Why tax a necessity that’s fundamental to existence? Opponents of meals taxes argue strenuously that we should eat to reside, and that these taxes damage low-income households greater than others. State governments argue that they want the extra income to offer providers to their residents.