Some states reconsidering taxes on groceries

grocery produce
Posted at 1:54 PM, Dec 14, 2021

Thirteen states still tax food meant for home consumption in some way — a tax that some say can limit equitable access to healthy foods.

Some of these states tax food at lower rates than other goods, while others offer rebates or credits to offset some of those costs. But Alabama, Mississippi and South Dakota still apply their full sales tax to groceries. In addition, shoppers in some states where groceries aren't taxed still need to pay local taxes on food.

"The problem with the grocery sales tax is that it places the greatest burden on those who have the least," said Eric Figueroa with the Center on Budget & Policy Priorities.

The Center found that sales tax makes both income and racial inequalities worse. The lowest earners pay almost eight times more than families who earn the most.

With food prices rising steadily, advocates see it as an opportunity to make the tax system fairer. But they caution against just eliminating taxes on food altogether.

"Anywhere where there is the chance to either roll back expensive tax credits, or giveaways to wealthy corporations or the wealthy, and sort of offset that with changes to the tax code that helped everyone, and that helped folks at the low end the most, is a good place to go for lawmakers," Figueroa said.

Virginia's new Republican governor-elect, Glenn Youngkin, campaigned on the promise to eliminate the state grocery tax. Other state leaders are making similar pitches.