The average family of four in the U.S. reportedly spends more than $1,100 a month on groceries, and they’re not being extravagant. Food costs increased about 2.5% in 2024 from the previous year.
A family’s grocery bills often end there, but many states and jurisdictions tack a sales tax on these purchases as well. Their tax rates can fluctuate monthly because legislation to eliminate, reduce, or alter them is frequently proposed.
Key Takeaways
- Most states draw a dividing line between groceries and restaurant meals and don’t tax food purchased for home consumption.
- Numerous states have launched legislation to reduce or eliminate food taxes, but some efforts have failed.
- Several states don’t tax food at the state level but allow their counties and local jurisdictions to do so.
- At least one state taxes retailers instead of consumers.
States That Tax(ed) Food
There are food taxes…and then there are food taxes. Most states that don’t impose them draw a dividing line between food purchased at a grocery store for home preparation and food consumed at a restaurant or from street vendors. The keywords that appear in their legislation are often “unprepared food” or “food intended for home consumption.” These foods dodge the tax.
These states charged a sales tax on grocery store foods at the close of 2024, but legislation is pending in some. They’re listed in order from the cheapest tax to the most expensive.
Kansas
Kansas began phasing out its food tax in 2023, but residents and shoppers still had to pay a 2% tax in 2024, down from 4% in 2023. The state eliminated the tax entirely as of Jan. 1, 2025, making it the most tax-friendly food state on our list heading into 2025 because it’s become one that doesn’t levy a food tax at all.
Arkansas
Arkansas is the second kindest state. The food tax rate in Arkansas is just 0.125% as of 2025. A legislative bid attempted to remove the tax entirely in 2024, but the measure failed. Governor Sarah Huckabee Sanders vowed to try again to eliminate it in her State of the State address in January 2025.
Illinois
The food tax in Illinois has been on-again and off-again in recent years. It was eliminated from July 1, 2022, through June 30, 2023, but was reinstated at 1%. Further legislation is set to eliminate it entirely as of January 2026.
Virginia
Virginia’s food tax is also 1% and it doesn’t apply to all groceries. Most cold-prepared foods and staples are taxed, however.
Missouri
Missouri comes in just behind Illinois and Virginia, with a rate of 1.225%. This is a 3% reduction from 2023, so the state is headed in the right direction for dollar-conscious shoppers.
Utah
Utah’s state tax rate on groceries is 1.75%. A possible elimination of the tax was set to be decided by voters in the November 2024 election, but a rally by lawmakers prevented the issue from appearing on the ballot.
Alabama
Alabama is another state where the food tax has been in flux in recent years. It was cut from 4% to 3% in early 2024 and then was projected to be reduced an additional 1% in September 2024, but was ultimately rejected. According to Alabama’s Department of Revenue, “If there is sufficient growth in the state Education Trust Fund for the next fiscal year, then the state rate will be reduced on September 1, 2025.”
Tennessee
Tennessee imposes a 4% tax rate on food purchases. Legislation was introduced in 2024 to eliminate the tax, but the bill was not passed. Legislators have refined its terms and plan to try again in 2025.
South Dakota
Most groceries in South Dakota are taxed at a rate of 4.2% through at least 2027. Repealing the tax was put to a vote in November 2024, and voters overwhelmingly rejected the option. South Dakota doesn’t have a separate food tax but applies its overall sales tax to food purchases.
Oklahoma
Oklahoma’s grocery tax was up there at 4.5%, but the state eliminated this tax in 2024 for food and ingredients sales. Prepared food is still subject to the tax.
Idaho
This state appears at the top of the most expensive list, with a tax rate of 6%. Idaho does, however, have a grocery tax credit that offsets the sales tax paid on groceries throughout the year. It averages $120 for most residents.
Mississippi
Mississippi charges a sales tax of 7%, which applies to food purchases. This rate makes it the unkindest of all states when it comes to taxing grocery items. In January 2025, the Mississippi House passed a bill to cut the grocery tax over the next decade. As of writing, it’s with the Senate for consideration.
Other Food Taxes
Many of these tax rates come with a big catch: They’re state taxes. Some states don’t prohibit counties and municipalities from piling their own food taxes on top of those charged at the state level, which can greatly increase food costs. They include:
- Alabama: Local jurisdictions
- Arkansas: City and county taxes
- Idaho: Local jurisdictions
- Kansas: Local jurisdictions
- Missouri: Local jurisdictions
- Oklahoma: Municipalities
- Tennessee: Local jurisdictions
- Utah: 1% local and .25% county
Local jurisdictions in Illinois have retained the right to levy the eliminated state tax if they choose to do so.
Hawaii doesn’t charge consumers a food tax, but it did charge retailers at a rate from 4% to 4.5% as of 2024, and they may pass the burden on to their customers with an additional surcharge of up to .5%.
Groceries vs. Restaurant Fare
A distinction must be made between “food” and “groceries.” States that exempt groceries from taxation don’t generally exempt restaurant meals and other let’s-eat-out-tonight food. Tennessee’s rate doesn’t cover restaurant and prepared foods, nor does Oklahoma’s, which excludes dietary supplements.
Utah allows restaurant diners to request a separate receipt for any unprepared food purchases they make at the location so they’re not charged the tax.
States That Offer Help
A few states acknowledge that paying a tax on that loaf of sandwich bread can put a pinch on some household budgets and increase food insecurity. Hawaii offers a grocery tax credit to low-income taxpayers to take some of the bite out of retailers passing on their own tax burdens to consumers.
Low-income earners are eligible for a $120 grocery tax refund in Idaho. Each of a family’s dependents also entitles them to $120. Residents who are age 65 or older get $140.
Tennessee occasionally offers food sales tax “holidays,” abating the tax for short periods.
The Bottom Line
Why tax a need that’s basic to existence? Opponents of food taxes argue strenuously that we must eat to live, and that these taxes hurt low-income families more than others. State governments argue that they need the additional revenue to provide services to their citizens.