Phase-out of state grocery sales tax unanimously passes House committee

Elimination of State Grocery Tax ‘Sales’ Through Committee

OKLAHOMA CITY -- A bill to provide relief to Oklahoma families at the grocery store unanimously passed the House Appropriations and Budget Subcommittee on Finance on Wednesday.

House Bill 3621, authored by House Minority Leader Emily Virgin, D-Norman, phases out the 4.5% state portion of the grocery tax over three years:

• 3 percent, starting July 1, 2022 
• 1.5 percent, starting July 1, 2023
• Fully exempt from state sales tax effective July 1, 2024

Democrats called for the end of the grocery tax last session in their 2021 Oklahoma Focused Budget. This session, the initiative has found bipartisan support from members of the House, members of the Senate, and the Governor. 

“Two of the top priorities of the House Democratic Caucus this year are to eliminate the state portion of this tax and to increase the state earned income tax credit,” Virgin said. “These two things are realistic ways the Legislature can help Oklahoma families recovering from the pandemic.”

Virgin held a study over the summer on eliminating the tax. One of the biggest questions raised during the study was how legislation to eliminate the state tax would affect taxes levied by cities and towns that rely on the sales tax for revenue.

“This legislation does not affect the budgets of municipalities,” Virgin said. “As state lawmakers, we are only interested in ending the state’s 4.5 percent tax on groceries. I strongly believe that cities and counties should have the autonomy to set their own tax rate just as I believe they should have the autonomy to raise the minimum wage.”