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Hungry? You better also have an appetite for taxes because some states tax food purchases

April 30, 2015

The money saving advice to grocery shoppers is don't go to the market when you're hungry. Today, I found a blogging corollary.

Eat before you write about taxes.

I didn't get around to having lunch before participating in an early afternoon sales tax webinar. So as I was finally scarfing down my midday meal at my desk, I got to thinking about taxes on food.

Italy food flag basil spaghetti tomatoesAt the 2015 Sydney International Food Festival, the Australian advertising agency Whybin\TBWA created food-based representations of the flags of 18 countries. I love Italy's green, white and red vertical stripes displayed as basil, spaghetti and tomatoes. Photo courtesy Dose and Ads of the World.

Tax value of food: It's no surprise that prepared food, either bought as take-out or eaten at a restaurant, is taxable.

But some states also tax the food we buy at our local H.E.B., Publix, Kroger, Whole Foods, Trader Joe's, Walmart, Safeway, United, or neighborhood food mart.

That doesn't seem right to me. Everybody has to eat. It's a prime biological directive.

But then, that makes food a great tax target since we all, at least to some degree, buy food for the meals we have at home.

The good gustatory tax news is that most of the 45 states and Washington, D.C., that tack sales taxes onto most everything we buy do not tax food. 

But if you live in one of the others and you have a hearty appetite, you also better have an appetite for taxes.

State sales tax on food: The states where the general sales tax is collected on food purchases, according to Federation of Tax Administrators' data, are Alabama, Hawaii, Idaho, Kansas, Mississippi, Oklahoma, and South Dakota.

Most of these states — Hawaii, Idaho, Kansas, Oklahoma and South Dakota — at least offer lower income households a rebate or income tax credit to make up for the food tax.

And a handful of states collect a lower rate state sales tax on comestibles. They are:

  • Arkansas, with a 1.5 percent food sales tax rate instead of applying the state's 6.5 percent general sales tax rate (plus local sales taxes),
  • Illinois, with a 1 percent food sales tax rate instead of applying the state's 6.25 percent general sales tax rate,
  • Missouri, with a 1.225 percent food sales tax rate instead of applying the state's 4.225 percent general sales tax rate,
  • Tennessee, with a 5 percent food sales tax rate instead of applying the state's 7 percent general sales tax rate,
  • Utah, with a 1.75 percent food sales tax rate instead of applying the state's 5.95 percent general sales tax rate (plus local sales taxes), and
  • Virginia, with a 2.5 percent food sales tax rate instead of applying the state's 5.3 percent general sales tax rate.

Food sales not subject the state's sales tax, but local sales taxes do apply in Georgia, Louisiana and North Carolina.

If you live in one of these states, remember to chow down before hitting the grocery store aisles because you have to pay more for your food anyway due to taxes.

There is, however, one tax amuse-bouche for some food shoppers.

A few of states that do tax food also allow a rebate or income tax credit to compensate poor households. They are Hawaii, Idaho, Kansas, Oklahoma and South Dakota.

You also might find these items of interest:

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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