Thirteen states and many localities continue to tax the sale of groceries, even though the taxes disproportionately hurt the poor and may affect the quality, variety and even the amount of food they can afford to put on the table.
The reason: The taxes provide a steady source of revenue in volatile times, making it difficult for states to get rid of them without finding a way to make up the revenue. Recent efforts in several of the states to eliminate or lower the taxes have failed.
“States might be looking at getting rid of sales tax on groceries, but groceries are between a sixth and a seventh of all consumption,” said Scott Drenkard, analyst at the Tax Foundation, a nonpartisan tax study group. “If you want to raise the same amount of money you might have to increase the [general] sales tax by a full percentage point.”
Alabama, Hawaii, Idaho, Kansas, Mississippi, Oklahoma and South Dakota tax groceries at the same rate as the sales tax on all purchases, according to the Tax Foundation. Arkansas, Illinois, Missouri, Tennessee, Virginia and Utah tax food at a lower rate. Seven fewer states tax groceries than in 1998, when researchers at the Center for Budget and Policy Priorities found that 20 did. But the trend to eliminate the tax has stalled.