The 'Food Tax': Grocery Tax by State

Adding a "food tax" to the already high cost of groceries places an extra financial burden on many families.

According to data from the Census Bureau’s ongoing Household Pulse Survey, some 18 million respondents in late June said their household ‘sometimes’ didn’t have enough to eat within the last seven days.

Over 69 million individuals reported their household had enough food — but not always the kind they wanted.

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In some areas, the sales tax on groceries soars above 10%. That means some families are spending more than $10 on sales tax for every $100 of groceries they buy. And although most states have done away with the tax on groceries (at least at the state level), 11 states still tax food items.

(Note: Local sales tax may apply to groceries in some states that have exempted groceries at the state level.)

Food Tax

Why states tax groceries 

Grocery taxes can provide significant revenue for states, often used (at least in part) to fund essential departments, such as education and transportation.

Of the 11 states that still tax groceries, five impose a reduced tax rate.

Additionally, three states are preparing to eliminate their grocery taxes — with one having repealed its tax on food items this summer.

• Some states offer a grocery tax credit that helps offset taxes paid throughout the year.
• Lawmakers in several states have introduced bills to reduce or eliminate taxes on groceries over the past few years.

Here are the states that still impose a statewide tax on groceries as of August 2024.

Alabama

Alabama still taxes groceries, but the state passed legislation that would reduce Alabama's grocery tax by 2%. The first 1% cut went into effect last September, reducing the state's tax rate from 4% to 3%.

The second 1% tax cut will be imposed on Sept. 2024, according to the Alabama Policy Institute.

However, the 1% food tax reduction doesn’t apply to local tax jurisdictions. So in areas where the local and combined sales tax rate is 10% (such as Montgomery), Alabama residents still pay a 9% tax when they visit the grocery store.

Arkansas

In Arkansas, the sales tax on groceries is reduced to 0.125%. This is the lowest tax rate of the states that tax groceries.

A bill to eliminate this "food tax" was introduced last spring, but it never passed the Arkansas House or Senate.

Hawaii

Although Hawaii doesn’t technically have a sales tax, the state does have an excise tax, which is passed to consumers and reflected in retail prices. This tax applies to groceries. The tax rate averages 4.44% in Hawaii, according to Tax Foundation data.

However, eligible residents may claim a Hawaii grocery tax credit to help offset the tax on groceries. There are several requirements for claiming the state's grocery tax credit, and federal adjusted gross income (AGI) is a factor.

For the previous tax year, single filers with an AGI of $40,000 or more ($60,000 for joint filers) couldn’t claim the credit. Additionally, those listed to claim the credit including yourself, your spouse or dependents must have been present in Hawaii for more than nine months in 2023 to be eligible.

Idaho

Idaho taxes groceries at the full 6% state sales tax rate. However, the state offers a grocery tax credit. The refund averages $120 for most Idaho residents, according to the Idaho State Tax Commission.

Idahoans may also receive a credit for each qualifying dependent. Part-year residents may receive a partial tax grocery tax credit.

Illinois

Some Illinois taxes increased in July, including the state’s sales tax on groceries. However, Illinoisans won't have to worry for long. On Aug. 5, 2024, Illinois Gov. J.B. Pritzker signed legislation repealing the state grocery tax on items meant to be consumed off-premises.

Starting January 1, 2026, Illinois will eliminate the 1% sales and use grocery tax on food for human consumption. The tax break doesn't include alcoholic beverages, foods infused with adult-use cannabis, soft drinks, candy, or food prepared for immediate consumption.

Still, local governments will have the option of imposing the 1% tax by ordinance.

This isn't the first time Illinoisans have had tax-free groceries. The state temporarily rolled back its 1% rate on food tax for one year, which ended on July 1, 2024.

The expiration of the grocery tax suspension came at a bad time for many state residents since Illinois increased its already high gas tax the same day along with several other states that increased gas taxes on July 1.

Kansas

Kansas still taxes groceries, but the state is gradually reducing the tax until it’s eliminated in 2025. The first reduction went into effect last year.

Kansas grocery tax is now 2% (reduced from 4%), but this reduction does not apply to local tax rates.

For more information, see Kansas Food Tax Cut: How Much Will You Save?

Mississippi

Mississippi currently has the highest-taxed groceries in the U.S. The state taxes essential food items at the regular 7% tax rate. Some Mississippi lawmakers proposed reducing the grocery tax, but their efforts haven’t succeeded.

Efforts to reduce the state’s income tax have been more successful. As a result, some Mississippians began paying less income tax last year.

Missouri

Missouri is another state with a reduced tax on groceries. The state currently imposes a 1.225% tax, down 3% from 4.225%, but cities and counties can charge their own sales tax rates.

Local tax rates alone can exceed 8% in some areas of the state, according to the Tax Foundation.

Oklahoma

Oklahoma eliminated its 4.5% statewide grocery tax on August 29, 2024. According to state lawmakers, each family could save as much as $648 a year once the tax cuts are enacted.

Still, Oklahomans are not entirely off the hook. Grocery shoppers can expect to pay a sales tax on some items since the tax cut doesn't include all foods. For more information see Why You'll Still Pay Oklahoma Grocery Tax.

Local sales taxes, as high as 7% in some areas, will still apply once the Oklahoma grocery tax cut takes effect.

South Dakota

A four-year “tax holiday” reduces South Dakota’s sales tax rate, including the tax on groceries, from 4.5% to 4.2%. This temporary tax cut took effect on July 1, 2023.

Some South Dakota lawmakers want to repeal the state’s grocery tax.

Voters will have the chance to decide on the measure this coming Election Day 2024. For more information, see Big State Tax Changes to Watch on the 2024 Ballot.

Tennessee

Tennessee’s tax on groceries is 4%, but local jurisdictions can add up to 2.75% in local sales taxes.

Last year, state residents received a three-month break from the state-wide sales tax on food ending in October. WKRN reported that Tennessee families were able to save at least $100 during the three-month break for tax-free groceries. If the state eliminated its 4% tax rate on grocery items, the average family could save up to $400 annually.

While the state will not offer a tax-free holiday on groceries this year, a bill was introduced that aims to eliminate the tax on grocery items. If passed, the state would cut its grocery tax starting January 1, 2025.

So far, the bill seems to be stalled as of April 2024.

Utah

Although the state’s portion of the grocery tax is 1.75%, Utah residents are charged a 3% tax on groceries statewide. A bill passed by lawmakers would eliminate the 1.75% state portion of the tax.

However, for this change to take effect, voters would need to approve the measure in November 2024. Even if voters give the OK, Utah residents will still pay the remaining 1.25% food tax.

Honorable Mention: Alaska

Alaska doesn't have a statewide sales tax, but local jurisdictions may charge their sales taxes on grocery purchases.

Honorable Mention: Georgia

In Georgia, groceries aren’t taxable at the state level, but individual counties and other jurisdictions may implement a sales tax on groceries.

As of July 1, 2024, the state’s sales and use tax rate is 4%.

Honorable Mention: North Carolina

In North Carolina, groceries are generally exempt from the state's 4.75% sales tax.

However, a local sales tax of 2% applies to food purchases for home consumption. So while you won't pay state tax on groceries in NC, local jurisdictions tax qualifying food items.

Honorable Mention: Virginia

Virginia technically eliminated the 1.5% state sales tax on groceries last year, but localities still charge a 1% tax rate. So, residents in the commonwealth aren't completely off the hook.

Republicans previously proposed a bill that would end the local sales tax option on groceries, but efforts to eliminate the food tax at the local level have failed so far.

Related: Is a Meals Tax Coming to Virginia?

Related Content

• Why You’ll Still Pay Oklahoma Grocery Tax
• Kansas ‘Food Tax’ Cut: How Much Will You Save?
• Big State Tax Changes to Watch on the 2024 Ballot