"Taxation on Groceries in 2025: Identifying the Remaining States That Impose Such Taxes"
In the United States, the issue of food taxes continues to be a point of contention for many families. While most states do not impose sales tax on groceries, some still tax food for home consumption, adding to the financial burden of families.
In 2025, 18 million households experience food insecurity, according to the latest government data. The financial strain caused by food taxes is a significant factor contributing to this number. In states like Tennessee, a 4% tax on groceries, with local jurisdictions able to add up to 2.75% in local sales taxes, can add up to 10% or more at the checkout for some families.
However, there are signs of change. In 2021, Tennessee families saved at least $100 during a three-month break from the state-wide sales tax on food, and could save up to $400 annually if the tax rate on grocery items was eliminated. Similarly, Oklahoma eliminated its 4.5% statewide grocery tax on August 29, 2024, potentially allowing each family to save as much as $648 a year once the tax cuts are enacted.
Other states are also considering reductions in their grocery taxes. Mississippi, for example, reduced its sales tax on groceries from 7% to 5% in July 2025, with plans to further reduce it to 2.5% by 2036. Kansas eliminated its grocery tax in January 2025, after gradually reducing it over the past year.
Not all states have been successful in their attempts to repeal the grocery tax. Voters in South Dakota had the opportunity to decide on the measure during the 2024 Election, but it was turned down. South Dakota temporarily reduced its sales tax rate, including the tax on groceries, from 4.5% to 4.2% on July 1, 2023, but efforts to fully repeal the tax have so far been unsuccessful.
Some states, like Idaho, tax groceries at the full state sales tax rate but offer a grocery tax credit. In Idaho, residents are charged a 3% tax on groceries statewide, but a credit is provided to offset some of the cost. Missouri currently imposes a 1.225% food sales tax, with local tax rates potentially exceeding 8% in some areas.
Efforts to reduce Missouri's grocery tax to support low-income families are being considered, but the tax still generates significant revenue. Hawaii has an excise tax that averages 4% on groceries, while Arkansas' sales tax on groceries is 0.125%.
In Utah, a bill passed by lawmakers would eliminate the 1.75% state portion of the tax, but voters must approve the measure in November 2024 for the change to take effect. Illinois currently has a 1% state tax on grocery items, but this tax is set to be eliminated for certain food items starting January 1, 2026.
However, Illinois has the option to re-impose a 1% tax on groceries by ordinance, after temporarily reducing it for one year (July 1, 2024 - July 1, 2025). Some Mississippi lawmakers are uncertain whether lowering grocery taxes will support revenue growth.
Rising grocery prices in 2025 could cause a shift in the number of households that can afford food. The potential savings from the elimination or reduction of food taxes could provide much-needed relief for many families struggling to make ends meet.
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