Sales Tax on Groceries by State 

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 of 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 the most food-insecure US counties are the ones that 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. However, individual counties and other jurisdictions are still allowed to require sales tax on grocery purchases.

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. Additionally, a few 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 its own rules and laws, including which items are considered grocery items and thus tax exempt.

Many state 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, is 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. However, 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.

Free Download: Sales Tax Guide for E-Commerce

Sales tax is complex. That’s why we’ve broken down all the important information you need to ensure your e-commerce business is sales tax compliant.

Get the Guide

Sales Tax by State: Are Groceries Taxed?

Several states, including Idaho, South Dakota, Oklahoma, Mississippi, and others, require consumers to pay sales tax on groceries. Other states tax groceries at a reduced rate or charge them at the local level.

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. 

States That Tax Groceries

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.

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 as to what is charged and not charged, from certain food ingredients to prepared food.

Taxes on Groceries: FAQ

Below are frequently asked questions about sales tax on groceries:

About the author

Zamp Team

The Zamp Team consists of experienced writers and editors who are dedicated to researching sales tax topics to help readers make smart decisions about their business and sales tax compliance. Collectively, the team has over 200 years of sales tax experience.