Just want to know about grocery taxability in your state? Go directly to our “Are groceries subject to sales tax?” chart.
Do you have to charge sales tax when selling groceries? The short answer is that, in most cases, no!
But the much longer answer is that most states consider grocery items like flour, vegetables and milk a necessity and don’t require sales tax on them at all.
However, in the US, sales tax varies by state. This means states get to make their own rules and laws when it comes to how to tax groceries and what type of item is even considered a grocery item.
Let’s dig into grocery sales tax.
How Grocery Sales Tax Works
All but a handful of states either have no sales tax on groceries or require sales tax on groceries at a reduced state rate.
However, some of those states with no state sales tax on groceries still allow local areas to apply sales tax to groceries.
For example, South Carolina has a 6% state sales tax rate, but that rate doesn’t apply to groceries. However, South Carolina counties may impose an additional 1% sales tax. In counties without that 1% sales tax, groceries in South Carolina are non-taxable. In groceries with that sales tax, an SC grocery shopper would pay a 1% sales tax on their cart full of groceries.
Some states tax groceries at a reduced state rate. For example, the Missouri statewide sales tax on most items is 4.225%. But the state only requires a 1.225% state sales tax on groceries. However, local rates (counties, cities, etc.) may still apply.
Which grocery items are taxable?
Just because grocery items are not taxable in a state doesn’t mean that everything you buy at the grocery store isn’t subject to sales tax.
Prepared foods, such as a ready-made sandwich you buy in the deli, or a box of donuts you buy to snack on, are generally always taxable.
Sugary snacks like candy and soda are generally always taxable, too, even in states where groceries are otherwise non-taxable.
And don’t forget every state is different. The definition of “prepared food” in one state may vary from the definition of “prepared food” in another state! This can get a little confusing if you sell food products.
Unsure if your products are taxable? Contact HOST for a custom tax matrix. We’ll ensure you are collecting the correct amount of sales tax on all of your products in every state.
Are groceries subject to sales tax?
Scroll down to states where you have sales tax nexus to determine if grocery items are taxable there. Keep in mind that the definition of “grocery” item may vary by state.
|State||Sales Tax on Groceries?||More Info|
|Alaska||Not statewide, but local grocery sales tax may apply||Alaska only has local level sales tax and no statewide sales tax|
|Arkansas||Groceries are taxed at a reduced 0.125% state sales tax rate and local sales tax rates may apply|
|Delaware||No sales tax|
|Georgia||Groceries are not taxed at the state level, but local areas may apply a sales tax|
|Illinois||Groceries are taxed at a reduced 1% state rate, and local sales tax rates may also apply||This 1% state sales tax on groceries was temporarily suspended between July 1, 2022 and June 30, 2023|
|Kansas||Groceries are taxed at a reduced 4% state rate, and local sales tax rates may also apply||Kansas is in the process of phasing out grocery tax. Starting January 1, 2024 the Kansas state sales tax rate on groceries will be 2%. Starting January 1, 2025 this rate will drop to 0%.|
|Missouri||Groceries are taxed at a reduced 1.225% state sales tax rate, and local sales tax rates may also apply||The reduced statewide sales tax rate applies to any food that can be bought with SNAP benefits (AKA “food stamps”)|
|Montana||No sales tax|
|New Hampshire||No sales tax|
|Oklahoma||Yes||Groceries purchased with SNAP benefits (AKA “food stamps”) are tax exempt in Oklahoma. Some nonprofits serving the elderly or other needy demographics may also purchase groceries tax free.|
|Oregon||No sales tax|
|South Carolina||Groceries are not taxed at the state level, but local areas may apply a sales tax|
|Tennessee||Groceries are taxed at a reduced 4% state sales tax rate, and local sales tax rates may also apply|
|Utah||Groceries are taxed at a reduced 1.75% state sales tax rate, and local sales tax rates may also apply|
|Virginia||Groceries are not taxed at the state level, but the statewide local tax of 1% still applies to groceries|