States push to cut grocery tax as food inflation climbs

As consumers continue to face higher prices at the grocery store, state governments are looking at new ways to lower the cost at checkout. Three of the 13 US states that currently tax groceries have made recent efforts to possibly eliminate or lower these taxes. Here’s what to know:

Oklahoma: Oklahoma Governor Kevin Stitt signed into law today a bill to eliminate the state’s 4.5% grocery tax. The state’s Senate passed it last week after it made it through the House last year.

“Today, we get to fulfill a promise to all four million Oklahomans and pass the largest single year tax cut in Oklahoma history,” Stitt said in a statement on Thursday after its passage. “Cutting the grocery tax means relief for all Oklahomans.”

The law ends the state grocery tax and blocks increases in local sales and excise taxes on food through June 2025. Senate Pro Tem Greg Treat said in a statement that the elimination of the state tax would save residents $400 annually, and would go into effect in August.

Illinois: Governor JB Pritzker supported cutting the state’s 1% grocery tax, which was temporarily suspended in 2022, during his budget address last week.

“Even if it only puts a few hundred bucks back in families’ pockets, it’s the right thing to do,” Pritzker said. The 2022 suspension was estimated to save taxpayers $360 million.

Tennessee: Republican lawmakers in Tennessee introduced a bill this month to allow government leaders across its counties and municipalities to lower the local 2.75% grocery tax rate. The bill advanced through a House subcommittee last week. The 4% state tax would not be impacted, though Democratic lawmakers also introduced a bill last year to eliminate it.

Zoom out: The move to reduce consumers’ grocery bills comes as food at home prices rose 0.4% in January, per the Consumer Price Index, the highest jump in the category in a year. While prices remain elevated, several CPGs have said they plan to slow their increases this year.