Most Places Have Abolished Grocery Taxes, But These 9 States Are Still Charging Them

You grab a cart, toss in some bread, milk, eggs, and a few vegetables. The shelf price looks reasonable. You head to checkout. And then... bing. The total jumps.

Sound familiar? For most Americans, that jump isn't because of grocery taxes, it's just inflation doing its thing. But for shoppers in nine states, that extra charge at the register is something else entirely. It's a sales tax on food itself.

Here's the thing: most states don't tax groceries. And the number that do keeps shrinking. Oklahoma eliminated its grocery tax in 2024. Kansas followed in 2025. Arkansas and Illinois just ditched theirs in 2026.

So which states are holding out? Let's get into it.

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Grocery Taxes Are Disappearing, But Not Everywhere

First, some good news. The trend is moving in the right direction.

Oklahoma used to charge a 4.5% sales tax on groceries before eliminating it completely in 2024. Kansas phased its grocery tax down from 6.5% to zero, with the final elimination taking effect on January 1, 2025. Governor Laura Kelly put it simply: "The complete elimination of the state sales tax on food is a win for Kansas".

Arkansas and Illinois joined the club on January 1, 2026. Arkansas eliminated its remaining 0.125% state tax on groceries, while Illinois ended its 1% statewide grocery tax.

But here's where it gets tricky, and I'll come back to this,  local taxes can still apply even when the state tax goes away. More on that in a minute.

First, let's look at the nine states where you're still paying at the register.

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The 9 States Still Charging Grocery Taxes in 2026

Let me be clear: "grocery tax" here means state-level sales tax on unprepared food intended for home consumption. Think bread, milk, eggs, produce, meat, the staples.

Alabama, 2% (Plus Local Taxes)

Alabama has been slowly chipping away at its grocery tax. The state dropped it from 4% to 3% in 2023, and then to 2% effective September 1, 2025.

But here's the real kicker: local municipalities can add their own taxes. In some areas, the combined rate on groceries can reach 10%. Yes, you read that right. Ten percent. On food.

What it means for you: On a $200 grocery trip, you're paying $4 in state tax. With local taxes, it could be significantly more.

Hawaii, 4% to 4.5% (With a Credit)

Hawaii is unique. Instead of a traditional sales tax, the state uses a General Excise Tax (GET) of 4%. Counties can add up to 0.5%, bringing the total to 4.5% in some areas.

The good news? Hawaii is actually phasing this tax out. The rate dropped to 2% in 2025, will drop to 1% in 2026, and is scheduled for full elimination in 2027.

What it means for you: For now, that $200 grocery trip costs an extra $8 to $9.

Idaho, 6% (But Most Residents Get a Credit)

Idaho now has the highest state-level grocery tax in the nation at 6%.

But, and this is important, most Idaho residents can claim a grocery tax credit when filing their taxes. The standard credit is $155, and you can deduct up to $250 of the grocery tax you actually paid if you save your receipts.

What it means for you: That $200 grocery trip? $12 extra at checkout. If you shop weekly, that's $624 per year, more than you'd pay across the border in tax-free Montana. The credit helps, but you're still paying upfront.

Mississippi, 5% (Reduced from 7%)

Mississippi gave shoppers a break effective July 1, 2025, when the grocery tax dropped from 7% to 5%.

But a couple of important notes. First, the reduced rate only applies to SNAP-eligible foods. Second, local taxes can still apply.

What it means for you: On that $200 grocery trip, you're paying $10 in state tax.

Missouri, 1.225% (Local Taxes Apply)

Missouri takes a different approach. The state taxes groceries at a reduced rate of just 1.225%, but only for food that qualifies for federal food stamp (SNAP) purchases.

Then local taxes pile on top. Combined rates can range from about 4.225% to over 10%, depending on where you shop.

What it means for you: The state portion is small, about $2.45 on a $200 trip. But local taxes could add significantly more.

South Dakota, 4.2% (Voters Said No to Repeal)

South Dakota's statewide sales tax rate dropped from 4.5% to 4.2% on July 1, 2023. Groceries are taxed at that full rate.

Voters rejected a ballot measure to fully exempt groceries in 2024.

Local jurisdictions can add up to 2%, meaning shoppers in Sioux Falls, Brookings, and Rapid City could pay as much as 6.2% total.

What it means for you: At 4.2% state rate, a $200 grocery trip costs an extra $8.40.

Tennessee, 4% (Plus 2.5–2.75% Local)

Tennessee taxes groceries at a reduced state rate of 4%. But local jurisdictions add their own taxes, typically 2.5% to 2.75%, bringing the total to between 6.25% and 6.75% depending on location.

There's active debate about eliminating this tax. More on that in a bit.

What it means for you: A $200 grocery trip means roughly $8 in state tax and another $5 to $5.50 in local taxes. That's $13 to $13.50 total extra.

Utah, 3% (Uniform Reduced Rate)

Utah taxes groceries at a reduced, uniform 3% rate, rather than the general sales tax applied to most other goods. This includes most staple items like milk, eggs, bread, fruits, and even packaged candy.

What it means for you: On a $200 grocery trip, you're paying $6 in tax.

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Even "Tax-Free" States May Still Charge You at the Register

Here's something a lot of articles don't tell you.

Even if your state doesn't have a statewide grocery tax, local governments, cities, counties, and municipalities, can impose their own taxes on food.

Take Illinois. The state eliminated its 1% grocery tax on January 1, 2026. Great news, right? Except that more than half of Illinois residents will continue paying a local grocery tax. The state law actually authorized municipalities and counties to impose their own 1% local grocery tax by ordinance.

North Carolina doesn't have a statewide grocery tax, but allows cities and counties to apply their own 2% local tax. Even that is being challenged, the state legislature is considering a bill to repeal it.

The takeaway? Check your local rates. State exemption doesn't always mean tax-free.

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Why Economists Call the Grocery Tax "Regressive"

So why are so many states ditching this tax? The short answer: it's what economists call "regressive."

Here's what that means in plain English. A regressive tax takes a larger percentage of income from low-income households than from high-income households.

Low-income families spend a much bigger chunk of their budget on food. According to Engel's Law, the poorer you are, the larger the share of your income that goes to food. So taxing groceries hits them hardest.

The research backs this up. A Duke University study found that for every 1% increase in the grocery tax, the probability of a household being food insecure increases by 0.84%. On average across the U.S., a 4.2% grocery tax increases food insecurity risk by a little more than 3%.

There's also evidence that grocery taxes change how people shop. The USDA found that higher grocery taxes may discourage lower-income households from buying food to prepare at home, pushing them toward restaurants where food tends to be "more calorie-dense and nutritionally poorer".

"Taxing food is like slapping a surcharge on hunger." – Prince Albert Daily Herald

Another study found that for every $1 in grocery tax revenue collected, consumer food prices rise by about $1.44. That means shoppers are paying more than the tax itself, because of how the tax ripples through the supply chain.

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Why Some States Keep the Tax

To be fair, there's another side to this argument.

States that tax groceries typically rely on sales tax for a significant portion of their revenue. Tennessee, for example, has no state income tax, so sales taxes (including the grocery tax) are a primary funding source. Eliminating Tennessee's 4% grocery tax would cost the state nearly $824 million in annual revenue.

Supporters of the tax also point out that some states offer tax credits to offset the burden on low-income households. Idaho does this. Hawaii is phasing out its tax gradually.

And let's be honest, keeping the tax allows states to keep other tax rates lower. It's a trade-off.

But here's the counterargument: a grocery tax credit only helps people who file taxes and qualify. A full exemption helps everyone at the register.

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Which States Could Be Next to Eliminate Their Grocery Tax?

The momentum is clear. More states are moving away from taxing food than toward it. Here's who might be next.

Tennessee has multiple bills in the legislature to eliminate or reduce the 4% grocery tax. Both Republicans and Democrats have filed proposals. The holdup? Figuring out how to replace roughly $800 million in annual revenue.

Mississippi just reduced its tax from 7% to 5% in 2025. Could a full elimination follow? Possibly, but not immediately.

Alabama has been steadily reducing its grocery tax, from 4% to 3% to 2%. Advocates like Carol Gundlach with Alabama Arise say they "still have work to do" to eliminate it entirely.

Hawaii is already on a scheduled phase-out path. By 2027, the state's grocery tax should be gone.

South Dakota voters rejected a full exemption in 2024, but the issue isn't dead. As food prices remain high, pressure will likely build again.

Missouri has bills introduced to exempt food from state sales tax entirely.

The bottom line? The number of states taxing groceries is shrinking, not growing. It's a matter of when, not if, for most of these remaining states.

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What This Means for You

If you live in one of the nine states still taxing groceries, a few things to keep in mind:

Check for tax credits. Idaho offers a grocery credit. Hawaii is phasing out its tax. Some states have programs you might not know about.

Watch your local rates. Even if your state eliminates the tax, your city or county might still charge you.

Pay attention to state legislation. Tax laws change. This article will need updates as more states fall in line with the national trend.

And if you're not in one of these states? Double-check anyway. Local taxes are sneaky.

Nine states still tax your groceries at the state level: Alabama, Hawaii, Idaho, Mississippi, Missouri, South Dakota, Tennessee, and Utah.

But the landscape is changing fast.

Oklahoma, Kansas, Arkansas, and Illinois have all eliminated their state grocery taxes in just the past two years. More states are actively debating repeal. And even holdouts like Hawaii are on scheduled phase-out plans.

The economic argument against taxing food is strong. It's regressive. It hurts low-income families the most. It might even push people toward less healthy food choices.

But the argument for keeping it? Revenue. Plain and simple. States need money to fund schools, roads, and public safety.

The question isn't whether grocery taxes will eventually disappear in these nine states. It's when, and how states will replace that revenue when they do.

Now I want to hear from you. Do you live in one of these nine states? Have you noticed the extra tax at the register? Drop a comment below and share your experience. And if you found this helpful, share it with someone who might be overpaying for their groceries without even realizing it.