Part of the Food Policy Snapshot Series
Policy name: Kansas HB 2106 – “Axe the Food Tax” Bill
Overview: In May 2022, Kansas Governor Laura Kelly signed into law a bill that will gradually eliminate the state’s 6.5 percent sales tax on food by 2025.
Population: 3.0 million
Food policy category: Food supply and distribution, food services
Program goals: To make food more affordable to Kansas residents.
How it works: The food tax in Kansas will be removed from all groceries, including bottled water, candy, dietary supplements, soft drinks, food sold in vending machines, and any foods that require additional cooking or preparation prior to consumption. Taxes will remain on alcohol, tobacco, and most prepared foods.
The state food tax will decrease over the next two years before it is eliminated completely. Starting on January 1, 2023, the food tax will decrease to 4 percent, down from 6.5. On January 1, 2024, it will go down to 2 percent, and by January 1, 2025, there will be no state tax on food.
Local sales taxes on groceries will still apply.
Progress to date: In 2019, Governor Kelly vetoed Senate Bill 22, which would have reduced the food tax, as well as House Bill 2033, another attempt at reducing food tax. Her reason for vetoing the bills was that they would create a “self-inflicted budget crisis for the state.”
On January 14, 2022, House Bill 2487 was introduced with the goal of eliminating the food tax immediately, but House Republicans voted against it. A similar bill, SB 342, was introduced in the Senate, but it did not pass either. HB 2106, also introduced in January, would have removed all food tax by July 2022, but the bill underwent significant revisions including an increase of the timeline to reduce the food tax over a period of two years, before Governor Kelly signed it into law in May.
Why it is important: Kansas is one of only 13 states that taxes food, and at 6.5 percent, it has the second highest tax rate after Mississippi’s 7 percent. Nationwide, food costs increased 10.9 percent from October 2021 to October 2022, making it difficult for many families to afford groceries and increasing food insecurity. In addition, Kansas grocery stores located near the state’s borders have been closing over the past decade, forming food deserts, partially because the food sales tax incentivizes some Kansans to travel to neighboring states for groceries.
Eliminating the state food tax in Kansas will reduce some of the financial burden for consumers and help keep grocers in business.
Program/Policy initiated: Governor Kelly signed the bill into law on May 11, 2022.
Point of contact:
Kansas Office of the Governor
- In January, a bill was introduced in Alabama to eliminate the state’s 4 percent food tax. A decision has not yet been reached.
- Utah Representative Judy Weeks Rohner introduced a bill to the state legislature in early 2022 that would eliminate their 1.75 percent food tax, but it did not pass. She re-introduced the bill later in the year, and it is still under consideration.
- Oklahoma Governor Kevin Stitt is calling for elimination of the state’s 4.5 percent tax on food.
- Illinois temporarily suspended its 1 percent food tax from June 30, 2022, until June 30, 2023.
- Virginia’s 2.5 percent food tax will be reduced to 1 percent beginning on January 1, 2023.
Evaluation: A formal evaluation has not yet been conducted because the law has not yet gone into effect.
- Inflation May Be Easing, but Grocery Prices Are Still Way Up (CNN)
- Many Americans Struggle to Get Food. Inflation Is Making It Worse (NPR)
- States Weigh Grocery Tax Pause as Inflation Surges, but It May Not Provide Much Relief (Fox Business)
- With Inflation Spiking, Will States and Voters Give Grocery Taxes a Second Look? (USA Today)
- A Look Into Gov. Laura Kelly’s Promise to ‘Axe the Food Tax’ in Kansas (KSNT)
- As Food Prices Soar, Some States Consider Cutting Taxes on Groceries. But That May Not Be the Best Approach, Research Finds (CNBC)
- Bill Eliminating Sales Tax on Food to Be Reintroduced in Utah Legislature (Fox 13 Salt Lake City)
- Food Insecurity Trended Upward in Midst of High Inflation and Fewer Supports (Urban Institute)
- Governor Laura Kelly Refuses to Endorse Another Tax Experiment, Vetoes Senate Bill 22 (Kansas Office of the Governor)
- Governor’s Calls for Grocery Tax Elimination Face an Uphill Battle in the Oklahoma Senate (ABC 8 Tulsa)
- Grocery Tax (Virginia Tax)
- HB 2033 (Kansas)
- HB 2106 (Kansas)
- Illinois Grocery Tax Suspended for Year Starting Friday (US News and World Report)
- Kansas Is Eliminating Its Food Tax. Here’s How the New Law Will Affect Your Grocery Bill (The Kansas City Star)
- Oklahoma Lawmakers Continue Push to Eliminate Grocery Tax (ABC 8 Tulsa)
- SB 22 (Kansas)
- SB 342 (Kansas)
- Summary Findings Food Price Outlook, 2022 and 2023 (Economic Research Service)
- Why One Utah Representative Wants to Get Rid of the Utah State Sales Tax on Groceries (KSL)
- You’ll Be Paying a Lower Sales Tax for Groceries in Kansas Soon, but It Won’t Go to Zero Until 2025 (NPR)