Sales Tax on Groceries by State 

In brief:

• Most states don’t require a sales tax on groceries.
• Even if a state does require sales tax on groceries, many tax them at a reduced rate. 
• Because studies show that the most food-insecure counties in the US are ones with a grocery tax, more states are now considering abolishing their sales tax on groceries.

Grocery items like bread and vegetables are exempt from sales tax in most US states. But before you set every consumable you sell as “non-taxable” let’s dig into the nitty gritty on sales tax on grits (and other groceries.) 

Why are groceries tax exempt?

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

In fact, studies have shown that that the most food-insecure US counties are the ones who still levy a sales tax on groceries. A recent US trend has states like Virginia and Kansas either phasing out or abolishing the state sales tax on groceries altogether. 

How Grocery Sales Tax Works

Currently 15 US states have some form of sales tax on groceries. 

Several of these states have no statewide sales tax on groceries, but allow local areas to still require a sales tax on grocery sales. For example, in Georgia, groceries are not taxable at the state level. But individual counties and other jurisdictions are still allowed to require sales tax on grocery purchases. 

Example: When buying a loaf of bread in Cherokee County, Georgia, you would not be required to pay Georgia’s 4% sales tax rate. But you’d still be required to pay the 2% Cherokee County special local option tax.

Some other states tax groceries, but at a reduced rate. Missouri, for example, taxes groceries at a reduced state sales tax rate of 1.225%. But again, local areas in Missouri are also allowed to tax groceries. 

Learn more about how combined sales tax rates work here.

Some states, like Oklahoma, tax all grocery items but allow for exceptions for nonprofits purchasing and selling grocery items. 

Are all groceries tax exempt?

Not everything sold at a grocery store qualifies for a sales tax exemption. As with all things sales tax, each state gets to make their own rules and laws, and that includes which items are considered grocery items and thus tax exempt.

Many states’ laws say that anything that can be bought with either state or federal Supplemental Nutritional Assistance Program (SNAP) benefits (AKA food stamps) qualifies as groceries and are tax exempt. 

But generally food seen as unhealthy or without nutritional value, such as candy and soft drinks are still taxed, even in states where groceries are generally tax exempt. Alcoholic beverages are generally always taxable and may also be subject to an additional excise tax.

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

The key takeaway is, if you sell foods and beverages and have sales tax nexus in a state where groceries are non-taxable, always double check to be sure that the actual items you sell qualify for the state’s sales tax exemption.

Sales tax by State: Are Groceries Taxable?

Below is a list of states and how they tax grocery items. Be sure to understand each state’s definition of “groceries” when deciding when (and when not) to collect sales tax on food items.