Why You’ll Still Pay Oklahoma Grocery Tax

Oklahoma is eliminating state grocery taxes, but that doesn’t mean groceries will be tax-free. Here's what you need to know.

shopping cart calculator and pencil and receipts
(Image credit: Getty Images)

Oklahoma is finally eliminating its 4.5% statewide tax on groceries, an initiative that took two years to achieve. State lawmakers estimate the tax cut will save each family an average of $648 per year.

"Today, we get to fulfill a promise to all four million Oklahomans and pass the largest single-year tax cut in Oklahoma history. Cutting the grocery tax means relief for all Oklahomans,” Gov. Kevin Stitt said when signing the bill.

However, while the grocery tax cut will save Oklahomans money, shoppers will still pay sales tax when they visit the grocery store, some more than others. That’s because not all food items are covered under the Oklahoma tax cut, and local taxes can vary dramatically depending on which part of the state you shop in.

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Additionally, although Gov. Stitt has signed the grocery tax cut bill, the law won’t go into effect right away.

Bill eliminating grocery tax in Oklahoma

The bill to eliminate Oklahoma’s grocery tax won’t become effective until late August, ninety days after the current legislative session ends. So, families won’t see a change in their grocery bills for several more months. 

Additionally, the tax cut only applies to the state’s 4.5% portion of sales tax. So, Oklahomans will still pay local sales tax on all types of groceries, which can reach as high as 7% in some areas of the state. That means some residents will still pay $70 in sales taxes for every $1,000 spent on groceries once the law takes effect. 

Because the tax cut doesn’t apply to local taxes, residents might pay even more grocery taxes in the future, if counties and cities raise their sales tax rates. However, the newly signed law prohibits them from doing so until at least July 1, 2025.

What groceries will be tax-exempt? Not all grocery items will be exempt from Oklahoma’s 4.5% sales tax. 

  • Ready-to-eat prepared foods will not be tax-exempt.
  • Oklahoma’s 4.5% state tax will still apply to grocery deli items.
  • Heated foods will still be taxed at the current rate. 

So, families who routinely purchase these types of items might not notice savings as significant as families who don’t.

Oklahoma income tax cut 

Oklahoma is one of only 13 states to still tax groceries, and now that the state’s grocery tax is being eliminated, Gov. Stitt is turning his attention to eliminating Oklahoma’s income tax. Nearby states have already taken steps to reduce income taxes, and bordering state, Texas, imposes no individual income taxes.

When speaking of the state’s income tax, Stitt said, “We think we need to put Oklahoma on a path to zero” and that if Oklahoma tax cuts don’t keep up with other states, it will get “left behind.”

Since passing the grocery tax bill, Oklahoma House lawmakers have already advanced two bills that would cut state income taxes, to eliminate them over time. 

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Katelyn Washington
Tax Writer

Katelyn has more than 6 years’ experience working in tax and finance. While she specializes in tax content, Katelyn has also written for digital publications on topics including insurance, retirement and financial planning and has had financial advice commissioned by national print publications. She believes that knowledge is the key to success and enjoys helping others reach their goals by providing content that educates and informs.