Is Your State Among Those with the Lowest Taxes on Food?

The cost of groceries for the average family of four in the U.S. continues to rise, with reports showing they spend over $1,100 a month on food. This increase is not due to extravagant spending but rather to the overall rise in food costs, which went up by about 2.5% in 2024 compared to the previous year.

While food prices are already a significant expense for families, some states and jurisdictions add a sales tax on grocery purchases, further increasing the financial burden on consumers. However, not all states impose taxes on groceries, with many differentiating between food purchased for home consumption and meals eaten at restaurants.

States like Kansas, Arkansas, and Illinois have made efforts to reduce or eliminate food taxes, with varying degrees of success. Kansas, for example, phased out its food tax entirely as of January 1, 2025, making it one of the most tax-friendly states for food purchases.

On the other hand, states like Mississippi impose a sales tax of 7% on food purchases, making it one of the least favorable states for grocery shopping. However, there are initiatives in place to reduce this tax over the next decade.

Some states also offer assistance to low-income taxpayers to alleviate the burden of food taxes. For example, Hawaii provides a grocery tax credit, while Idaho offers a refund for low-income earners and their dependents.

Overall, the debate around food taxes continues, with opponents arguing that these taxes disproportionately impact low-income families, while state governments defend them as necessary for revenue generation. As the cost of groceries continues to rise, it remains an important issue for many families across the country.

The following U.S. states impose a tax on groceries:

• Alabama: 3% state tax rate, with the possibility of further reduction to 2% in 2025. Local jurisdictions may also impose taxes.
• Arkansas: 0.125% state tax rate, plus applicable local taxes.
• Hawaii: 4% average excise tax rate, with a grocery tax credit available to low-income residents.
• Idaho: 6% state tax rate, with a grocery tax credit available to residents.
• Illinois: 1% state tax rate, set to be eliminated in 2026. Local governments may still impose the 1% tax.
• Kansas: 2% state tax rate, set to be eliminated in 2025. Local taxes still apply.
• Mississippi: 7% state sales tax rate.  
• Missouri: 1.225% state tax rate, plus local taxes.
• Oklahoma: 4.5% state tax rate, eliminated for food and ingredients sales in 2024. Local taxes may still apply.
• South Dakota: 4.5% state sales tax rate.
• Tennessee: 4% state tax rate, plus local taxes.
• Utah: 3% combined state and local tax rate.

And a few states don’t tax groceries at the state level, but do allow local governments to impose taxes on food for home consumption.  They include:

• Alaska
• Georgia
• North Carolina
• Virginia

The primary argument for taxing groceries is to provide states (or local governments) additional revenue.  As we move into a period in America where fiscal responsibility is taking more of a front seat in decision-making to address the country’s massive debt problem, maybe the states listed above need to consider areas to trim their budgets to allow money-strapped citizens to at least get a break on taxes on food items that are a necessity to survival.