These states may eliminate taxes on groceries

The number of states imposing sales taxes on groceries has decreased over the years, and more states are considering doing the same as Americans face high prices for eggs and other household staples.

Here’s what to know about taxes on groceries in the United States:

States that tax groceries in 2025

What we know:

While most U.S. states have gotten rid of sales tax on groceries, at least at the state level, the following states still have them:  

• Alabama (3%)
• Arkansas (0.125%)
• Hawaii* (general excise tax - 4%)
• Idaho* (6%)
• Illinois (1% – but will be eliminated in 2026)
• Mississippi (7%)
• Missouri (1.225%, local sales taxes may also apply)
• South Dakota (4.2% – but slated to go back up to 4.5% in 2027)
• Tennessee (4%, local sales taxes may also apply)
• Utah (3%)

*Hawaii and Idaho offer tax credits to residents to help offset the tax 

Which states are considering grocery-tax reductions?

Dig deeper:

The number of states taxing groceries has decreased in recent years, with laws eliminating the state levy taking effect in Oklahoma and Kansas over the last year. A law eliminating Virginia's tax on groceries took effect in 2023. A law eliminating Illinois' 1% grocery tax is set to take effect in 2026.

Recently, lawmakers in Alabama, Arkansas, Mississippi and Tennessee have called for grocery-tax reductions:

• Alabama: Alabama Democratic lawmakers plan to introduce tax-cut legislation that will include eliminating the state’s remaining 3% grocery tax. Lawmakers in 2023 approved legislation to gradually drop it from 4% to 2%.
• Arkansas: Arkansas Gov. Sarah Huckabee Sanders on Tuesday unveiled the details of her proposal to eradicate the remaining 0.125% sales tax the state levies on groceries. The state had all but eliminated the grocery tax under Sanders' predecessors, Democratic Gov. Mike Beebe and Republican Gov. Asa Hutchinson. All that remains is the 1/8th sales tax that's applied under a voter-approved constitutional amendment for outdoors programs. Eliminating that will cost Arkansas nearly $11 million a year, a figure Sanders said the programs can absorb.
• Mississippi: A tax-cut package moving its way through the state legislature would cut that state's 7% sales tax on groceries.
• Tennessee: Republican legislative leaders have proposed abolishing the state’s 4% sales tax on groceries. The legislation comes after the state’s handful of Democratic lawmakers have unsuccessfully introduced similar proposals as they argue that residents are paying as much as 6.75% in sales tax on essentials like bread and milk in some areas with local sales taxes. However, it remains unclear how far even a GOP-backed bill will fare in Republican-dominant Tennessee. State revenues are expected to be tighter this year, and Gov. Bill Lee didn’t include a cut in his proposed budget, nor did he include a grocery sales tax holiday that has typically been included in his legislative priorities.

Big picture view:

The efforts come as states face uncertainty about their budgets due to cuts in Medicaid and other federal programs being eyed by Republicans in Washington, according to the Associated Press. But supporters of the tax cuts are citing headlines about soaring egg prices as the reason they are needed now.

What they're saying:

"We’re getting rid of Arkansas’ most regressive tax and giving a helping hand to those who need it the most," Sanders, a Republican, said at a news conference this week to discuss her proposal.

"If we’re serious about helping working people get ahead, the best and most impactful way to do that is to take less in taxes and give them some peace of mind when they pay the rent or go to the grocery store," Alabama House Rep. Adline Clarke, a Democrat, said in a news release.