Sales Tax on Groceries by State 

With food prices already straining household budgets, the last thing families need is additional taxes on their grocery bills. Yet millions of Americans face this reality every time they shop. The U.S. Census Bureau's 2024 Household Pulse Study found that 6.5 million Americans often don't have enough to eat, and research shows that the most food-insecure counties in the US are precisely those that still levy sales tax on groceries.

Here's what you need to know about grocery sales tax in 2025.

Which States Tax Groceries in 2025?

The good news is that most states don't require sales tax on groceries, such as bread, vegetables, and other essentials. However, 11 states still impose some form of grocery tax, though many offer reduced rates compared to their standard sales tax.

States That Tax Groceries

While New Mexico offers a tax exemption for groceries, the exemption only applies to retail food stores (N.M. Stat. § 7-9-92). To qualify, a retailer must be approved by the state for a Retail Food Store Certification (NM Taxation and Revenue Department form RPD-41295). Therefore, since a certificate is needed for the exemption to apply, food can be considered taxable in the state.

States With No Statewide Grocery Tax

The remaining 39 states plus Washington, D.C., do not impose state-level sales tax on groceries. This includes:

Understanding Local vs. State Grocery Taxes

Even if your state doesn't tax groceries, you might still pay local grocery taxes. This creates a patchwork system that can be confusing for shoppers.

How Local Taxes Work

Some states that exempt groceries at the state level still allow local jurisdictions to impose their own taxes on groceries. Here's how this works in practice:

Example: Shopping in Cherokee County, Georgia

• Georgia state tax on groceries: 0% (exempt)
• Cherokee County local tax: 2%
• Total tax on a loaf of bread: 2%

This means you could drive from one county to another and face different tax rates on the same groceries.

What Qualifies as Tax-Exempt Groceries?

Not everything sold at a grocery store qualifies for tax exemptions. States have varying definitions of what constitutes "groceries," leading to some surprising distinctions.

Generally Tax-Exempt Items

• Basic food staples (bread, milk, vegetables, meat)
• Items eligible for purchase with SNAP benefits
• Unprepared foods for home consumption

Often Still Taxable

• Candy and soft drinks: Many states specifically exclude these from grocery exemptions
• Alcoholic beverages: Almost always taxable, often with additional excise taxes
• Prepared foods: Hot foods, items sold with utensils, or "ready-to-eat" meals
• Non-food items: Soap, paper products, and other grocery store items

The Utensil Rule

Prepared food (sometimes also called “food ready to eat”) is generally always subject to sales tax. However, states can get so granular that sometimes they consider food items “ready to eat” if they are sold with utensils but consider the same item sold without utensils to be “grocery food” (and therefore non-taxable). 

Why Are Groceries Tax Exempt?

Like all taxes, sales tax is political. States often exempt necessities like food, medicine, and sometimes even clothing from sales tax. 

In fact, studies have shown that the most food-insecure US counties are the ones that still levy a sales tax on groceries. A recent US trend has states like Illinois abolishing the state sales tax on groceries altogether.

How to Find Your Local Grocery Tax Rate

Since tax rates can vary significantly by location, here's how to determine what you'll pay:

1. Check your state's department of revenue website for official tax rates
2. Contact your local tax authority for municipal rates
3. Review your grocery receipts to see the actual taxes charged
4. Use online tax rate calculators available through various state websites

Tips for Managing Grocery Tax Costs

If you live in one of the 11 states that tax groceries, these additional costs can add up to hundreds of dollars per year. However, there are several strategies you can use to minimize the impact on your budget and potentially save money on your grocery bills. Here are proven methods to reduce your grocery tax burden:

If You Live in a Taxing State

• Budget for the additional cost when meal planning
• Consider shopping in neighboring jurisdictions with lower rates if practical
• Focus on SNAP-eligible items in states like Missouri that only tax non-SNAP items
• Buy prepared foods elsewhere if your state taxes them heavily

When Shopping Out of State

• Research tax rates before major shopping trips
• Keep receipts to understand what you're paying
• Consider timing major grocery purchases when traveling to non-taxing states

Sales Tax on Groceries: Conclusion

In conclusion, several states charge sales tax on groceries. Some offer a reduced rate, while others leave the decision to local lawmakers. There may be exceptions in every state regarding what is charged and what is not, ranging from certain food ingredients to prepared foods.

If you're looking to get sales tax taken off your plate, Zamp is here to help. From product taxability to registrations, filing, and more, you'll never have to worry about the sales tax lifecycle again. Plus, we've been recognized by G2 for Best Meets Requirements, Easiest Setup, Easiest to Use, and Best Support.

About the author

Emily Kordys

Emily Kordys is a Content Marketing Manager with seven years of experience in the sales tax, auto, and real estate industries. She currently resides in North Carolina with her boyfriend and dogs, Shadow and Copr.