13 States That Tax Your Groceries

With inflation on the rise and prices seeming to skyrocket everywhere, many people certainly are struggling to save money on groceries. Luckily, food prices are only expected to rise 1.1% in 2025, according to the USDA Food Price Outlook.

Thirteen of the 45 states with a sales tax charge statewide taxes on groceries on top of any local or municipal taxes collected. Among those 13, some states offer lower tax rates on food or a rebate for you to claim on your tax return, but others tax groceries based on the total sales tax rate.

Editor's note: These rates are subject to change due to frequent alterations to sales tax regulations. 

Alabama is one of the few states that applies the whole state sales tax rate of 3% to food and groceries, a reduction from 4% as of September last year. 

There were expectations of another 1% reduction in September 2024, but it did not happen. Alabama's also combines state and local taxes on groceries, which can reach 10% in some areas of the state.

Mississippi has a relatively low cost of living, but groceries are still taxed at 7%. An upside to this high rate is that local taxes are not allowed on groceries in addition to the state tax. 

South Dakota policymakers recently delivered on sales tax relief by cutting the sales tax rate from 4.5% to 4.2%, but that rate reduction is temporary, set to expire in 2027.

With applicable local taxes combined, your grocery bill can get pricey quickly, which isn't great if you're on a tight budget.

Eligible seniors can participate in the Senior Box Program, which is available in all 66 counties. The program helps older individuals living on a fixed income. Individuals 60 or older with a household income at or below 130 percent of the federal poverty income guidelines can qualify.

Food, medications, and medical appliance sales in Illinois are only subject to a 1% tax rate, plus applicable local taxes. However, the governor has signed legislation eliminating 1% tax on groceries starting in 2026.

The state also taxes candy, soda, and alcohol at the state tax rate of 6.25%, plus any municipal taxes. Illinois is one of 18 states that says treats prepared with flour aren’t candy, so they’re taxed as regular groceries. For example, a regular chocolate bar is subject to more than six times the tax charged on a chocolate bar containing cookie pieces.

Missouri charges a reduced sales tax rate of 1.225% on grocery items, down from the standard sales tax rate of 4.225%. This includes food for in-home consumption and also includes plants or seeds to grow your own produce. Local taxes may still apply, and depending on the county you live in, may add 2% to 6% to your overall grocery bill.

Although Virginia technically eliminated the 1.5% state sales tax on groceries last year, localities still charge a 1% tax rate. So, residents in the commonwealth aren't completely off the hook.

Personal hygiene products such as diapers, incontinence pads, feminine hygiene products, and even bed sheets and mattress protectors are also included in this sales tax rate.

If purchasing groceries in Utah, you'll see a 3% tax added to your grocery receipt for general food sales. This is a combined rate, including 1.75% of state tax, 1% local option, and 0.25% county option.

Alcohol and tobacco are subject to the regular sales tax rate of 4.7% plus any local tax. Prepared food, such as food sold in a deli or already heated, or any food sold with utensils, is exempt from the reduced rate and subject to the combined tax rate, which could be as high as 8.85%, depending on the county where you make the purchase.

Arkansas taxes groceries at a highly reduced rate of 0.125%, plus local taxes. Candy and soft drinks are taxed at a 6.5% sales tax rate, the same as non-food items such as toothpaste or ice. The tax code stipulates that anything called candy cannot include flour; otherwise, it's considered food and subject to the reduced tax rate.

As you think about how to manage your money, moving to Hawaii is probably not at the top of your cost-saving list. Although Hawaii doesn’t technically have a state sales tax, it charges businesses a 4% General Excise Tax. Companies then typically pass that cost on to customers, along with any applicable municipal taxes.

Hawaii offers a refundable food tax credit for low-income residents, but it starts to phase out for anyone filing as an individual and making $30,000 or more a year (or $50,000 a year for joint filers). People who use this credit must complete and submit a separate form with their tax return, which creates an added barrier.

Tennessee doesn’t charge income tax, but it does have a sales tax rate of 7% plus any additional local or municipal tax.

Groceries are charged a reduced sales tax rate of 4%, but prepared food, including bakery goods, hot soup, deli dishes, candy, and alcohol, are taxed at the 7% sales tax rate.

In 2021, the state offered three days of sales tax holidays where food, food ingredients, and prepared foods were not charged sales tax, though alcohol, candy, and dietary supplements were still taxable.

Oklahoma’s state sales tax is 4.5%. The state has officially eliminated its sales tax on food and groceries as of August 29, 2024. ocal taxes remain unaffected.

There is a sales tax relief credit for low-income residents, but it’s only $40 per person in households that make less than $50,000 for the elderly, the permanently disabled, or those who claim a dependent.

For everyone who doesn’t fall into those categories, you have to make $20,000 or less per year to qualify. The amount of the rebate has not changed in the past three decades.

Idaho charges a state tax rate of 6% on groceries but does offer a tax credit that averages out to about $100 per person. 

The refund applies for most Idaho residents, plus $100 for each of their qualifying dependents. Residents 65 or older get $120.

Last year, the state passed a bill to reduce its sales and compensating use tax rate on food and food ingredients from 6.5% to 4%, and this year, they continued with the reduction plan, bringing that rate down to 2%. This reduction is moving towards eliminating the state sales tax on groceries completely in 2025.

Kansas offers a tax credit of $125 per person per year, and you must be at least 55 or older, have a permanent disability or a dependent under 18 years old, and have made less than $25,800. It also has to be the last tax credit taken on your state income tax return, after any other applicable credits or deductions, so it may not benefit low-income families who may not owe much state income tax anyway.

Taxes on food and groceries are controversial because food costs tend to take up a more significant proportion of the monthly budget for lower-income families. Most people don’t shop for groceries based on the tax rate of a particular item, but not paying attention to the taxes at the bottom of your receipt can take a bigger bite out of an already strapped budget.

As tax season approaches, check out the best tax software, and don’t forget that small amounts of tax add up, especially on necessities like groceries. Pay attention to your receipts and investigate your area’s grocery and food taxes to know what to expect and plan accordingly.