Starting tomorrow, Aug. 29, a significant change is coming to your grocery bills in Oklahoma. Thanks to House Bill 1955 (HB1955) passed in 2024, the state is eliminating the 4.5% state sales tax on groceries. This move is designed to ease the financial burden on residents, especially as the cost of living continues to rise.

— Key Points About the Tax Cut Elimination of State Grocery Sales Tax The primary focus of HB1955 is to remove the 4.5% state sales tax on groceries. This means that when you buy groceries, you will no longer pay this portion of the tax. For the average family in Oklahoma, this could mean savings of around $700 per year.

Impact on State Revenue

While this tax cut is great news for your wallet, it’s worth noting that it will reduce the state’s revenue by about $418 million annually. Some lawmakers are concerned about how this might affect funding for critical areas like infrastructure and education unless the state finds other ways to make up for the lost income.

Political & Economic Context Governor Kevin Stitt and other supporters of the bill view this tax cut as a fulfillment of a promise to reduce the financial burden on essential items like food. They argue this is a necessary response to the economic challenges and inflation that have made groceries more expensive for everyone.

Opposition & Concerns

Not everyone is on board with this change. Some lawmakers worry about the long-term implications for the state’s budget. They argue that the loss of revenue could lead to shortfalls in other important areas unless new funding sources are identified.

Implementation Timeline

The tax cut officially begins on Aug. 29. This means that as you head into the fall, you should start seeing lower grocery bills as the state portion of the sales tax is removed.

— How It Will Affect Your Grocery Bill What’s Changing?

When you buy groceries in Oklahoma, the 4.5% state sales tax will no longer be applied at the checkout. However, it’s important to note that this change only affects the state portion of the tax. Any local or municipal taxes will still apply.

WhatExactlyAre “Food and Food Items?” Under this tax cut, the term “groceries” refers specifically to “food and food items” that are intended for home consumption. These typically include:

• Fruits and Vegetables: Fresh produce like apples, carrots, spinach and bananas.

• Dairy Products: Milk, cheese, butter and yogurt.

• Meats and Poultry: Beef, chicken, pork and other meat products.

• Breads and Cereals: Bread, pasta, rice and breakfast cereals.

• Non-Alcoholic Beverages: Juices, bottled water and milk substitutes.

However, it’s important to note that not everything in a grocery store qualifies. Items that are ready-to-eat or prepared foods, such as a rotisserie chicken, deli sandwiches, or salad bar items, are not covered by this tax cut. Additionally, alcohol, tobacco products, and dietary supplements will still be taxed.

How Much Will You Save?

Let’s say you buy $100 worth of groceries in Oklahoma:

• Before the Tax Cut: With the 4.5% state sales tax, you would have paid $104.50.

• After the Tax Cut: You’ll only pay $100 (plus any local taxes).

So, if you typically spend $150 on groceries, the $6.75 in state sales tax you would have paid will now be eliminated. Your total bill will just be $150, plus any applicable local taxes.

In Okmulgee County where we currently pay 4.5% in state taxes, 1.58% in county taxes, and 4.5% in city taxes, here’s how our bill will change:

• Before the Tax Cut: For $100 worth of groceries, you would have paid $110.58 total.

• After the Tax Cut: Your new total will be $106.08.

This means you save $4.50 on a $100 grocery bill.

What About Local Taxes?

While the state tax is being removed, local governments can still impose their own sales taxes. The final amount you pay could vary depending on where you shop. The Oklahoma Tax Commission will ensure that stores correctly apply the new state tax rules while continuing to collect local taxes.

The Bigger Picture What This Means for You This tax cut is designed to help Oklahomans by lowering everyday costs for essential items. Retailers across the state will need to update their systems to ensure that the savings are passed on to you at the checkout.

Over the course of a year, these savings can add up. If you spend $100 on groceries each week, you could save about $234 annually. These savings might seem small on a weekly basis, but they can make a noticeable difference over time, especially as families continue to face rising costs due to inflation.

— Where to Find More Information For more details on this tax change and how it affects you, visit the Oklahoma Tax Commission’s website at tax. ok.gov. This resource will provide up-to-date information and answers to any questions you might have about the grocery sales tax cut.