Grocery Tax Elimination Headed To Governor Stitt's Desk

A bill to cut the state’s portion of the grocery tax is headed to Governor Kevin Stitt’s desk. If the governor signs the bill into law, Oklahomans could see relief at the grocery store in August.

The state senate voted 42-2 to pass the measure that will eliminate the 4.5% state sales tax on groceries. The bill cleared the House of Representatives 88-7 last March.

Lawmakers call this a historic day when they’ve given Oklahomans the largest single-year tax cut in state history. “I am extremely proud to be the leader of this chamber that has not rushed into a decision,” said Senate Pro Tem Greg Treat, ( R) OKC.

Treat says this tax cut will save the average Oklahoman $400 a year. “I can no longer provide for my family going in weekly for $100 or less and most Oklahoma families can't,” said Treat.

Treat says it’s important to note that the legislation will not impact cities' and counties' ability to tax groceries, saying they rely on those tax dollars for local municipalities, roads and bridges.

Lawmakers did put in a protection though, to ensure those local taxes aren’t immediately raised to cover the difference. “There is a moratorium on increasing taxes that would impact groceries until after June 30th of 2025 on a moving forward basis, nothing that's happened previously,” said Treat.

After years of back-and-forth over the measure, there was debate until the final vote, largely from Senate Appropriations Chair, Roger Thompson. “When I got here in 2014 we were $600 million in the red, $800 million in the red, $1.3 billion in the red,” said Sen. Thompson, ( R) Okmulgee. 

Sen. Thompson says he worries about the $411 million price tag of this tax cut. “Without any humor, I can say I still have flashbacks of 2018; those were difficult days,” said Sen. Thompson.

Treat assures that the state has the funds to give back to taxpayers. “On rainy days today, we have $1.7 billion. In revenue stabilization, we have $4.1 billion. In unencumbered cash we have $2 billion,” said Treat.

Even with those savings, Treat says this is the only tax cut the Senate will approve this year. "We cannot spend beyond our means,” said Treat.

The Senate did not pass the emergency measure on this bill that would have allowed the measure to go into effect immediately upon being signed into law. Treat says the reason for that was to give the Oklahoma Tax Commission and local grocery stores time to prepare and adjust.

Gov. Stitt says he will sign any tax cut measure that comes across his desk, and if he stays true to that promise, Treat expects the measure to go into effect in mid-August.

House Speaker Charles McCall's statement:

“This is a truly historic day. With the passage of House Bill 1955, the Legislature has managed to give Oklahomans the largest single year tax cut in state history, returning $411 million to our citizens at a time when they need it the most," McCall said. "I would like to give a tremendous amount of credit to my colleagues in the House who have fought through both regular and special sessions over the past three years to cut taxes and provide relief to the citizens of Oklahoma. Their persistence and willingness to come in on weekends, holidays and during the interim to do the work of the people has led to a policy that will help all Oklahomans."

McCall said that the legislation's passage also would not have been possible without the support of Gov. Kevin Stitt and the House's colleagues in the Oklahoma Senate. "I would like to thank Gov. Stitt for his leadership throughout this process and his unwavering support in cutting taxes. He has been an ally and vocal proponent of getting tax relief legislation to his desk, and I am glad the Senate is finally delivering to him a bill that will help all Oklahomans," McCall said. 

"I would also like to thank President Pro Temp Greg Treat and our colleagues in the Senate for finally voting this legislation through to the governor's desk. The delay in the vote cost Oklahomans an estimated additional $374 million in taxes, and the lack of an emergency to immediately put the cuts in place will cost our citizens another $200M, but Senate leadership did their best to at least secure passage. The House has sent several tax cuts to the Senate over the last three years only to have them stall and not be heard. Thankfully this legislation has finally passed after 332 days of waiting. Oklahomans are currently facing some of the worst inflation of the last three decades, and the Senate's vote today means that help is finally on the way."

McCall added that while the passage of the grocery tax cut is a good first step, it is not the final step needed to truly help Oklahomans.

"There is continued work to be done to give Oklahomans back more of their hard-earned money. While the grocery tax is a good first step, it is not the only action needed to accomplish that goal. The House always knew this legislation would pass if put up for a vote, and we feel the same way about the .25% income tax cut. The House would still like to see a vote taken on the income tax cut legislation that was passed to the Senate in special session, and will continue to explore every opportunity to lower the tax burden for all Oklahomans."

House Minority Leader Cyndi Munson's statement: 

“I am pleased the Oklahoma State Senate has finally taken action on what we already know will help so many Oklahoma families. For the past several legislative sessions, including special sessions, the House Democratic Caucus has filed legislation to eliminate the state sales tax on groceries to provide immediate tax relief for working Oklahomans each time they go to the grocery store. It has always been our priority – and will remain a priority – for us to protect our revenue base while also advocating for policies that will lower costs for Oklahoma families who need it the most. By eliminating the state sales tax on groceries, we are accomplishing a goal House Democrats have been working on and supported for many years.”