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 the latest data from the Census Bureau’s ongoing Household Pulse Survey, some 18 million respondents said their households were food insecure at some point during the year. Another 6.8 million reported they had low food security due to insufficient money or resources for food.

Meanwhile, 29.7 million individuals reported their household had enough food, equal to 82.1% of the U.S. population.

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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. Although most states have done away with the tax on groceries (at least at the state level), 10 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 10 states that still tax groceries, less than a handful impose reduced rates.

Additionally, two recently states eliminated their grocery taxes — with one having repealed its tax this year.

• 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 January 2025.

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 would have been imposed on Sept. 2024, according to the Alabama Policy Institute, but was not issued because target growth in the Education Trust Fund was not met. As of 2025, Alabama’s state grocery tax stands at 3%.

Overall, the 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, and accounts for about $10 million in annual revenue.

That being said, the state does impose a 6.5% sales tax on most purchases outside of groceries.

Gov. Sarah Sanders said in her State of the State address that she wanted lawmakers to eliminate the grocery tax. However, no set plan has been set as to how to achieve the proposal.

A bill to eliminate this "food tax" was introduced two years ago, 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% 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 2024 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, of last year.

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.

Mississippi

Mississippi currently has the highest-taxed groceries in the U.S. The state taxes essential food items at the regular 7% tax rate. A bill was passed in January that would reduce the tax to 2.5% by 2036, decreasing by 0.2% annually. Still, some lawmakers are unsure whether lowering grocery taxes will support revenue growth.

Separately, efforts to reduce the state’s income tax have also been 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.

According to local reports, some Missouri lawmakers are considering eliminating the grocery tax to support low-income families. However, the tax alone gathered $1 billion in revenue during fiscal year 2024. That’s pushed other lawmakers to consider gradually reducing state sales over several years.

No concrete proposals have been pushed forward, so for now Missourians are stuck with grocery taxes.

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, but efforts have so far failed. Voters had the chance to decide on the measure during the 2024 Election, however, they turned down the opportunity to repeal the tax.

Tennessee

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

Two years ago, 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.

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 had to approve the measure in November 2024. The ballot measure failed, as education leaders cited concerns that the lack of grocery taxes would impact education funding.

States that recently eliminated grocery tax

Kansas

Kansas eliminated the grocery tax in January 2025. This comes after gradually reducing the tax over the past year.

Kansas grocery tax was 2% (reduced from 4%) last year, but the reduction did not apply to local tax rates.

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

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.

• Why You’ll Still Pay Oklahoma Grocery Tax
• Kansas ‘Food Tax’ Cut: How Much Will You Save?
• Ten States With the Highest Sales Taxes