States Weigh Grocery Tax Suspension, Removal

Even as inflation cools somewhat, lawmakers and leaders are trying to provide relief to consumers grappling with ongoing sticker shock. Many states that charge a grocery tax are working to extend, eradicate or change those compulsory charges.

In Mississippi, which charges a nation-high 7% grocery tax, a proposed bill would slash that tax by at least half. A recent poll from Mississippi Today and Siena College affirmed popular support for such a move: 68% of consumer respondents said they favor suspending the grocery tax.

Tennessee Gov. Bill Lee floated the idea of another grocery tax holiday in that state following a four-week suspension of that tax in 2022. "Last August, we gave Tennessee families a one-month break from grocery taxes, to provide relief amid nationwide inflation. We should do that again this year, but let’s extend it to three consecutive months," he declared. State legislators in Tennessee are running a parallel track for grocery relief, as two lawmakers proposed a bill to permanently exempt groceries from sales tax.

Other states that still levy taxes on groceries have also spent the early weeks of 2023 weighing ways to help consumers navigate their grocery bills and budgets. In early February, Oklahoma Gov. Kevin Stitt called for a halt to his state’s 4.5% grocery tax. Lawmakers in Missouri are also mulling the removal of that state’s 1% grocery tax.

Other states are taking a look at pushing the decision back to municipal governments. A bill has been put forth in Alabama that would allow local governments to lower or halt food taxes in their area. Likewise, the topic is being discussed in Arizona’s legislature, a development that spurred pushback from local governments who rely on those monies.

That reliance on grocery tax revenue is one reason why Illinois is bringing back that levy following an inflation-related suspension. The state’s 1% grocery tax will return on July 1.

In some areas, grassroots efforts are underway to compel the removal of grocery taxes. A group of consumers in Utah, for example, recently gathered at the state capital to protest the tax that they deem unfair to struggling residents.