In most states, there is no sales tax on groceries. In others, they are taxed at a reduced rate, and a small number, such as Kansas, include them fully in the tax base. Source: The Tax Foundation, 2011.
Most states collect no sales tax on groceries, meaning food purchased for home preparation and consumption is usually tax exempt. According to the Federation of Tax Administrators, six states currently tax groceries at a lower rate than the general state sales tax. Seven other states charge their full rate of sales tax on groceries.
One of those seven states is Kansas, which recently increased its statewide sales tax from 6.15% to 6.5%. Kansas also permits local governments to add their own sales tax, which raises the rate upwards of 9% in some parts of the state. This means Kansas charges the “second highest” grocery tax in the United States, according to KC Healthy Kids, a Kansas City-based public health organization.
KC Healthy Kids recently released a study in conjunction with the Kansas Public Finance Center at Wichita State University which highlighted the regressive nature of Kansas’ grocery tax. That is, households earning less than $10,000 per year pay, on average, 5.2% more of their income in grocery taxes than households earning more than $200,000 per year. Households in non-metropolitan (rural) areas also tend to pay more in grocery taxes than households located in urban areas.
Does sales tax on groceries contribute to obesity?
The study further suggested Kansas’ high grocery tax may contribute to obesity, since low-income consumers purchase less healthy convenience foods as they “are often cheaper than fresh foods.” KC Healthy Kids, which fights childhood obesity, said reducing or eliminating the Kansas sales tax on groceries would therefore help promote healthier eating. “Research has found that higher fruit and vegetable prices leads to increased obesity,” the group said in a policy brief which, not surprisingly, indicated more than 86% of Kansans would support eliminating the grocery tax altogether.
Kansas does offer limited relief for low-income households in the form of a “Food Sales Tax Credit,” which is $125 per year for each exempt member of a taxpayer’s household. The credit is available to any taxpayer with less than $30,615 in federal adjusted gross income. This is not a refundable credit, however, so only taxpayers who already owe state income tax may claim it.
But that is not enough, according to critics like KC Healthy Kids, who are demanding the Kansas legislature repeal the grocery tax during its 2016 session. According to the Kansas City Star, several lawmakers support reducing or eliminating the grocery tax, although concerns remain about the potential loss of revenue. “State officials estimate that a 1 percent reduction in the sales tax on groceries this fiscal year would result in about $66 million less revenue to the state,” the Star reported, but KC Healthy Kids noted “eliminating the sales tax on fruits and vegetables” could lead to a reduction in the state’s estimated $1.3 billion in annual obesity-related expenditures.
S.M. Oliva is a writer living in Charlottesville, Virginia. He edits the international legal blog PrivyCouncil.info
In most states, there is no sales tax on groceries. In others, they are taxed at a reduced rate, and a small number, such as Kansas, include them fully in the tax base. Source: The Tax Foundation, 2011. Most states collect no sales tax on groceries, meaning food purchased for home preparation and consumption is usually tax exempt. According to the Federation of Tax Administrators, six states currently tax groceries at a lower rate than the general state sales tax. Seven other states charge their full rate of sales tax on groceries. One of those seven states is Kansas, which recently increased its statewide sales tax from 6.15% to 6.5%. Kansas also permits local governments to add their own sales tax, which raises the rate upwards of 9% in some parts of the state. This means Kansas charges the “second highest” grocery tax in the United States, according to KC Healthy Kids, a Kansas City-based public health organization. KC Healthy Kids recently released a study in conjunction with the Kansas Public Finance Center at Wichita State University which highlighted the regressive nature of Kansas’ grocery tax. That is, households earning less than $10,000 per year pay, on average, 5.2% more of their income in grocery taxes than households earning more than $200,000 per year. Households in non-metropolitan (rural) areas also tend to pay more in grocery taxes than households located in urban areas. The study further suggested Kansas’ high grocery tax may contribute to obesity, since low-income consumers purchase less healthy convenience foods as they “are often cheaper than fresh foods.” KC Healthy Kids, which fights childhood obesity, said reducing or eliminating the Kansas sales tax on groceries would therefore help promote healthier eating. “Research has found that higher fruit and vegetable prices leads to increased obesity,” the group said in a policy brief which, not surprisingly, indicated more than 86% of Kansans would support eliminating the grocery tax altogether. Kansas does offer limited relief for low-income households in the form of a “Food Sales Tax Credit,” which is $125 per year for each exempt member of a taxpayer’s household. The credit is available to any taxpayer with less than $30,615 in federal adjusted gross income. This is not a refundable credit, however, so only taxpayers who already owe state income tax may claim it. But that is not enough, according to critics like KC Healthy Kids, who are demanding the Kansas legislature repeal the grocery tax during its 2016 session. According to the Kansas City Star, several lawmakers support reducing or eliminating the grocery tax, although concerns remain about the potential loss of revenue. “State officials estimate that a 1 percent reduction in the sales tax on groceries this fiscal year would result in about $66 million less revenue to the state,” the Star reported, but KC Healthy Kids noted “eliminating the sales tax on fruits and vegetables” could lead to a reduction in the state’s estimated $1.3 billion in annual obesity-related expenditures. In most states, there is no sales tax on groceries. In others, they are taxed at a reduced rate, and a small number, such as Kansas, include them fully in the tax base. Source: The Tax Foundation, 2011. Most states collect no sales tax on groceries, meaning food purchased for home preparation and consumption is usually tax exempt. According to the Federation of Tax Administrators, six states currently tax groceries at a lower rate than the general state sales tax. Seven other states charge their full rate of sales tax on groceries. One of those seven states is Kansas, which recently increased its statewide sales tax from 6.15% to 6.5%. Kansas also permits local governments to add their own sales tax, which raises the rate upwards of 9% in some parts of the state. This means Kansas charges the “second highest” grocery tax in the United States, according to KC Healthy Kids, a Kansas City-based public health organization.
