Sales taxes are present in forty-five of the fifty states, as well as the District of Columbia. The majority of these states do not tax food that is purchased for consumption at a private individual’s home. Many provide taxation relief to some degree while others tax food items fully.

Full Exemption

Twenty-nine states and the District of Columbia exempt the majority of food items from their state sales taxes, with Louisiana and New Mexico being the most recent states to convert to this practice. Illinois, Missouri, Tennessee and Virginia tax groceries but do so at lower rates than the standard sales tax that applies to other items.

Partial exemption

Idaho, Kansas, Oklahoma, South Dakota and Wyoming provide rebates and credits in order to offset the taxes that are paid on groceries. These rebates and credits are issued on a per family basis and do not generally give full tax relief.

Full Taxation

Alabama, Arkansas, Hawaii, Mississippi, South Carolina, Utah and West Virginia tax groceries fully and offer no form of rebates, credits, or relief.

Local Taxation

Although some states may offer partial or total relief from taxation of groceries, local level governments often levee taxes on groceries in order to produce increased revenue. Arizona, Colorado, Georgia, Louisiana and North Carolina are examples of this type of taxation as groceries in those states are partly or fully exempt but are taxed by local entities.

Positives and Negatives

While the taxation of food products can generate revenue for the government entity that levies the tax, it can place hardships on lower income families. The average family of four that has a financial status of just above the poverty line spends $350 per year in grocery taxes in order to have the basic essentials needed for a healthy diet. This $350 is usually more than a week’s income for a family that meets the criteria previously laid out. Taxation of groceries disproportionately affects lower class income families by almost four to five times the amount that high income families are affected. Only 8 cents from every consumption dollar spent in 1998 went towards the purchase of groceries. This makes sales tax revenue decline an ongoing problem for most states.