Three states slash sales tax on food in 2022

Three states slash sales tax on food in 2022

At least six states entered 2022 with an eye toward cutting or eliminating sales taxes on food. Three succeeded: Kansas, Illinois, and Virginia.

Kansas phases out state sales tax on food

Kansas will gradually reduce the state sales and use tax on food as follows:

  • From 6.5% to 4% effective January 1, 2023
  • From 4% to 2% effective January 1, 2024
  • From 2% to 0% (fully exempt) effective January 1, 2025

Bottled water, candy, dietary supplements, soft drinks, and food sold through vending machines, all of which are considered “food and food ingredients” for Kansas sales tax purposes, qualify for the exemption. However, the exemption doesn’t extend to local sales and use taxes. 

The state’s food sales tax credit will sunset at the end of tax year 2024. 

Illinois suspends state sales tax on food

The sales and use tax rate for food in Illinois is already low — 1% instead of the general rate of 6.25%. From July 1, 2022, through June 30, 2023, the 1% sales and use tax is suspended for many groceries.

However, candy, soda, and certain other products remain subject to the general 6.25% rate, plus applicable local taxes. For more details, read How should you report sales during the grocery tax suspension in Illinois.

Virginia cuts state sales tax on food

Food purchased for home consumption is exempt from Virginia’s state sales and use tax starting January 1, 2023. Local sales taxes remain in effect. 

States still looking to cut taxes on food

Several other states tried without success to cut or eliminate sales taxes on food for home consumption during their 2022 legislative sessions. These include:

  • Alabama (HB 173, HB 174, and SB 43)
  • Mississippi (HB 952, HB 1297, SB 2187, and SB 2375)
  • Oklahoma (HB 2844, SB 1473, and SB 1495)

The governor of Oklahoma doggedly tried to convince lawmakers to repeal the food sales tax during a special session of the legislature in October 2022. They didn’t, but they’ll likely revisit the issue in 2023.

For more information about states that tax (and want to exempt) food, read Flush states may exempt food from sales tax

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