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Kansas Considers Exemption for Fresh Foods

  • Mar 31, 2015 | Gail Cole

 Good and good for you.

Update: SB 263 died in committee.

Sin taxes impose tax, or higher rates of tax, on items considered bad for us. Alcohol tends to be subject to a higher rate of tax than milk, for example, although vegans might argue that point. States often impose sin taxes on cigarettes and other tobacco products, marijuana in states where it is legal, candy, and even soda and other sugary beverages. Higher rates of tax should, in theory, reduce consumption of products that create high costs for society (think health care).

Lower rates of sales tax and sales tax exemptions can work in a similar way. Many states have reduced sales tax rates for food ingredients (food for home consumption), and some states do not tax groceries at all (unless they’re sinful). Lower rates and sales tax exemptions should, in theory, encourage consumption of products that are good for us.

Kansas Senate Bill 263 embraces the latter philosophy. It seeks to eliminate the state sales tax on fruit and vegetables. It would exempt, in pertinent part: 

“[A]ll sales of fresh, unprepared fruits, vegetables, honey and herbs for human consumption that are not processed or prepared beyond their natural state, except for harvesting or cleaning processes, and not including dried fruits or vegetables, such as prunes, raisins, sun-dried tomatoes, or dried chili peppers, potted fruit or vegetable plants, potted or dried herbs, wild rice, nuts, maple syrup, cider, seeds, eggs, meat, cheese and seafood.”

If enacted, it would take effect on “July 1 of the calendar year after the calendar year in which the streamlined sales tax governing board, inc. has adopted the necessary amendments to the streamlined sales and use tax agreement to: (1) Create a new and separate product definition from ‘food and food ingredients’ in appendix C, library of definitions of the streamlined sales and use tax agreement, that includes the above items; and (2) allow member states of the streamlined sales and use tax agreement to tax sales of the above items of tangible personal property differently from sales of other items of tangible personal property included in the definition of ‘food and food ingredients’."

Healthy choices

The lawmakers behind the bill speak of “the long term impact on the citizens of Kansas.” They note that the Kansas state sales tax rate is the second highest in the nation, and that Mississippi is the only state with “a higher tax on food.” Lowering the cost of fruits and vegetables by at least 6.15% could also help put food on the tables of the roughly 21% of children in Kansas who live below the federal poverty level (PRWeb).

According to a statewide survey funded by the Kansas Health Foundation “86% of Kansans support eliminating the sales tax on fruits and vegetables.”

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.