State Grocery Sales Tax Eliminated In Oklahoma, Lawmakers Project Significant Savings

Starting Wednesday, the state portion of the grocery sales tax will be eliminated. State lawmakers anticipate the 4.5% tax cut will save Oklahoma families up to $900 annually. 

“The biggest impact we can make on Oklahomans pocketbooks and allow them to weather this record inflation is by eliminating the state portion of the grocery tax and that goes into effect Aug. 29,” said Senate Pro Tem Greg Treat, (R) OKC. 

The legislation, HB1955, was passed during the 2024 legislative session, but lawmakers gave a 90-day buffer for grocery stores across the state to adjust their prices before the law took effect. 

The tax cut will impact anything that's typically thought of as “grocery store food items,” or anything packaged by a manufacturer along with fresh and raw food. 

Some examples include milk, baby food, fruits and veggies, chips and frozen meals. 

What will still be taxed is items including alcohol, pet food, vitamins, toiletries and prepared food, which includes things like hamburgers — hot dogs and rotisserie chicken. 

The new law will also not impact the municipal taxes on groceries. State lawmakers acknowledge that grocery taxes are the largest category of sales taxes collected by municipal government, saying that they don’t want to impact that cash flow. 

“Cities in Oklahoma are almost all relying on sales tax, so we didn’t want to take away their lifeblood for their police departments, their fire departments, their street upkeep,” said Pro Tem Treat. 

For a full list of products that are and are not exempt from the tax cut, CLICK HERE.

The Oklahoma Tax Commission has also created a Q&A which can be found HERE.