Oklahoma eliminates statewide grocery tax

Oklahoma Gov. Kevin Stitt signed a bill in late February eliminating the state’s 4.5% tax on grocery purchases with almost unanimous support in the legislature. 

Prior to passage of the bill into law, Oklahoma was one of only 13 states to tax groceries, and its tax rate was among the highest in the nation. Only three states — Mississippi at 7%, Kansas at 6.5%, and Idaho at 6% — had a higher tax rate than Oklahoma and South Dakota, which both had their grocery tax set at 4.5%. 

Other states that tax groceries include Tennessee, Alabama, and Hawaii at 4%; Virginia at 2.5%; Utah at 1.75%; Arkansas at 1.5%; and Missouri at 1.23%. Illinois Gov. J.B. Pritzker also has also introduced a proposal to eliminate the grocery tax in his 2025 budget proposal.

In a press conference, Stitt said Oklahoma residents living in the southern part of the state told him they would do their grocery shopping in Texas to avoid paying taxes. “So since 2019, I’ve been talking about eliminating this grocery tax to bring people back home here,” he said, calling it “the largest single-year tax cut in Oklahoma history.”

Stitt called the grocery tax one of the most regressive in the state. The average Oklahoma household is expected to save roughly $700 a year.

“Once it takes effect, it will begin to save Oklahomans hundreds of dollars per year at the grocery store,” Senate Pro Tem Greg Treat said in a press release. “I also appreciate my Senate colleagues and our House counterparts who worked hard to deliver this for everyone.”