Discover Which States Have the Lowest Food Taxes in 2025 – Is Your State on the List?

In the United States, an average family of four spends over $1,100 monthly on groceries without indulging in luxury items. Food prices rose approximately 2.5% in 2024 compared to the previous year, impacting household budgets nationwide.

Beyond grocery bills, many states and local governments impose sales taxes on food purchases. These tax rates can change frequently as lawmakers propose new legislation to reduce or eliminate them.

Key Insights

• Most states differentiate between groceries and restaurant meals, often exempting food intended for home consumption from taxes.
• Several states have introduced bills to lower or remove food taxes, though some efforts have not succeeded.
• While some states don’t tax food at the state level, local governments may still apply their own taxes.
• At least one state taxes retailers instead of directly taxing consumers.

States with Food Taxes in 2024

Food taxes vary widely, with many states exempting unprepared foods bought for home use but taxing restaurant meals and prepared foods. Below is a list of states that imposed sales taxes on grocery items at the end of 2024, ranked from lowest to highest tax rates.

Kansas

Kansas began phasing out its food tax in 2023. In 2024, residents paid a reduced 2% tax, down from 4% in 2023. As of January 1, 2025, Kansas eliminated the food tax entirely, making it one of the most food-tax-friendly states heading into 2025.

Arkansas

Arkansas offers one of the lowest food tax rates at just 0.125% in 2025. Although a 2024 legislative attempt to remove the tax failed, Governor Sarah Huckabee Sanders pledged to pursue elimination again in her 2025 State of the State address.

Illinois

Illinois’ food tax has fluctuated recently. It was removed between July 2022 and June 2023 but reinstated at 1% afterward. New legislation aims to eliminate the tax entirely by January 2026.

Virginia

Virginia applies a 1% tax on many groceries, excluding some staples and cold-prepared foods.

Missouri

Missouri’s food tax rate stands at 1.225%, a 3% reduction from 2023, signaling progress for budget-conscious shoppers.

Utah

Utah’s grocery tax is 1.75%. A proposed ballot measure to eliminate this tax was blocked by lawmakers before the November 2024 election.

Alabama

Alabama’s food tax decreased from 4% to 3% in early 2024. A further 1% reduction was proposed for September 2024 but was rejected. The state may reduce the tax in September 2025 if the Education Trust Fund experiences sufficient growth.

Tennessee

Tennessee charges a 4% tax on food purchases. Legislation to repeal this tax was introduced in 2024 but did not pass. Lawmakers plan to reintroduce the bill in 2025.

South Dakota

South Dakota applies a 4.2% sales tax on most groceries, with voters rejecting a repeal in the November 2024 election. The state does not have a separate food tax but includes groceries in its general sales tax.

Oklahoma

Oklahoma eliminated its 4.5% grocery tax in 2024 for food and ingredients, though prepared foods remain taxed.

Idaho

Idaho has one of the highest grocery tax rates at 6%. However, it offers a grocery tax credit averaging $120 annually to offset these costs for residents.

Mississippi

Mississippi imposes a 7% sales tax on food, the highest among states taxing groceries. In January 2025, the House passed legislation to reduce this tax over the next decade, currently under Senate review.

Additional Local Food Taxes

Many states allow counties and municipalities to add their own food taxes on top of state taxes, increasing grocery costs significantly. States with such local food taxes include Alabama, Arkansas, Idaho, Kansas, Missouri, Oklahoma, Tennessee, and Utah.

In Illinois, local jurisdictions may still impose food taxes even if the state tax is removed.

Note on Hawaii

Hawaii does not tax consumers directly on food but charges retailers a tax rate between 4% and 4.5%, who may pass this cost onto customers with an additional surcharge up to 0.5%.

Groceries vs. Dining Out

It’s important to distinguish between groceries and restaurant meals. States that exempt groceries usually do not exempt prepared foods or restaurant meals. For example, Tennessee and Oklahoma tax prepared foods but not unprepared groceries.

Utah allows customers dining at restaurants to request separate receipts for unprepared food items to avoid the tax.

Support for Low-Income Households

Some states recognize the burden food taxes place on low-income families. Hawaii offers a grocery tax credit to low-income taxpayers to help offset retailer surcharges.

Idaho provides a $120 grocery tax refund for low-income earners and dependents, with seniors aged 65 and older receiving $140.

Tennessee occasionally implements food sales tax holidays, temporarily suspending the tax to provide relief.

Final Thoughts

Food is a basic necessity, and taxing it can disproportionately affect low-income families. Critics argue that food taxes are unfair, while state governments maintain they are essential for funding public services. Understanding your state’s food tax policies can help you better manage your grocery budget.

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