8 States That Tax Groceries in 2026

Expect to pay more for store-bought food if you live here

Cameron Huddleston,

Updated March 30, 2026

AARP

Comments

En español

Published February 02, 2024

/ Updated March 30, 2026

a plastic bag of groceries with the words no tax printed on the bag in a repeated pattern

Danielle Del Plato

Rising food prices are turning a trip to the supermarket into an eye-watering experience. More than half of adults 45 and older cite the cost of groceries as a major source of stress, according to a 2025 survey by the AP-NORC Center for Public Affairs Research. It’s no surprise, considering that food prices have been increasing steadily for the past several years.

You may be feeling the pinch of rising prices even more if you live in one of the eight states that tax groceries. On a positive note, the number of those states is down — from 10 in 2025 — thanks to legislation that kicked in at the start of 2026. And two of the remaining states with levies on food purchased in stores have lowered their tax rates in the past year.

“The current concerns around affordability are a driving force as lawmakers hear more from residents that their grocery bills are increasing,” says Neva Butkus, a senior analyst at the Institute on Taxation and Economic Policy (ITEP), a progressive think tank. “They’re seeing this as a way to ease people’s budgets a little bit.”

However, with state budgets now being squeezed, further reductions or removals of grocery taxes might not happen any time soon. “Groceries are a big part of the sales tax. States get a lot of revenue from it,” says Marco Guzman, a senior policy analyst at ITEP. “States considering eliminating the sales tax on groceries have to be mindful of the places to make up that revenue.”

If you live in one of these eight states, grocery taxes are a part of life.

1. Alabama

Alabama lawmakers reduced the state’s food and grocery tax rate from 4 to 3 percent in 2023, then dropped it from 3 to 2 percent in 2025, a move the Alabama Policy Institute estimates will save a family of four $236 or more a year. Local jurisdictions and municipalities can still charge a tax on top of the 2 percent.

2. Hawaii

Hawaii is one of the few states that tax groceries at their regular sales tax rate. Hawaii’s general excise tax — essentially a sales tax — is 4 percent, and counties can impose an additional tax of up to 0.5 percent. To offset some of the costs associated with food sold at stores, Hawaii offers single taxpayers with an adjusted gross income (AGI) of less than $40,000 and married taxpayers filing jointly with an AGI of less than $60,000 a tax credit of up to $220.

3. Idaho

Food is taxed at the state’s sales tax rate of 6 percent, but Idaho offers a break in the form of a tax credit. Residents can claim a grocery credit of up to $155 per person on their state tax return, up from $120 as a result of legislation that took effect in 2025. Residents who submit receipts for sales tax paid for food can receive a credit of up to $250.

4. Mississippi

Mississippi previously had the highest tax rate on groceries in the nation. However, legislation that took effect July 1, 2025, reduced the tax on groceries from 7 to 5 percent.

While Mississippi residents might save at the grocery checkout, they'll pay more at the pump. Butkus notes that the same law that reduced the tax rate for groceries increased the state’s tax rate on gasoline. It’s now 21 cents per gallon, up from 18 cents prior to 2026.

5. Missouri

Groceries in Missouri are taxed at 1.225 percent, and additional local taxes can apply. However, legislation has been introduced to exempt store-bought food from sales tax.

6. South Dakota

South Dakota taxes groceries at its full sales tax rate and doesn’t offer a tax credit to offset the cost for consumers. In 2024, residents voted down a measure that would have exempted groceries from sales tax, which was reduced from 4.5 to 4.2 percent in 2023 but is slated to go back up to 4.5 percent on July 1, 2027. Legislation has been introduced to keep the sales tax rate at 4.2 percent.

7. Tennessee

Groceries in Tennessee are taxed at 4 percent by the state. Local sales taxes may also apply.

Legislative attempts to eliminate the grocery tax failed in 2025. But lawmakers are trying again this year with new bills, Butkus says.

8. Utah

Utah has a 3 percent tax on food, composed of a 1.75 percent state tax and a 1.25 percent tax charged by local governments. A constitutional amendment that was on the ballot in November 2024 would have eliminated the state share, but it was voided by a judge who ruled that the state failed to provide sufficient public notice about it.

5 States That Have Stopped Taxing Groceries

Arkansas

A state law that took effect Jan. 1, 2026, eliminated Arkansas’ 0.125 percent sales tax on food and food ingredients. However, local sales taxes still apply.

Illinois

The state’s 1 percent tax on groceries was eliminated on Jan. 1, 2026, as a result of legislation signed into law in 2024. However, it allows municipalities and counties to impose a 1 percent tax on groceries. According to the Illinois Municipal League, 665 municipalities have enacted their own tax.

Kansas

The state sales tax on food ended Jan. 1, 2025. Groceries and prepared food had been taxed at a 2 percent rate in 2024. However, city and county sales taxes still apply.

Oklahoma 

Groceries are now exempt from Oklahoma’s 4.5 percent sales tax thanks to a state law that took effect Aug. 29, 2024. But local taxes still apply and can top 5 percent in some cities.

Virginia

A 2022 state law eliminated Virginia’s 1.5 percent tax on groceries starting Jan. 1, 2023, according to the Virginia Department of Taxation, but local governments still have the option to charge a 1 percent tax.

Need help with your tax return? Try AARP’s tax calculator. Visit AARP Foundation Tax-Aide to learn more about free tax prep services by 30,000 volunteers nationwide.

%{postComment}%

Cameron Huddleston is an award-winning personal finance journalist and author of Mom and Dad, We Need to Talk: How to Have Essential Conversations With Your Parents About Their Finances. Her work has appeared in Kiplinger.com, Kiplinger's Personal Finance, Forbes Advisor, Chicago Tribune, Business Insider and many more online and print publications.