The Oklahoma State Senate voted today 42-2 to end the state's 4.5% sales tax applied to groceries, sending the measure to Governor Kevin Stitt for his signature (the House voted 88-7 to pass HB1955 last year, meaning the bill was still eligible for Senate action this session). The change will likely take effect in August.
Local sales tax on groceries still applies; Locally assessed sales taxes on groceries will remain unchanged by the law through June 30th, 2025, after which point it seems counties and municipalities can change their rates (... which I'm sure they will).
The bill specifies that the state sales tax would be 0% for 'food and food ingredients sold for human consumption', while excluding the following from that definition (and thus still taxed): alcoholic beverages, dietary supplements, marijuana and marijuana-infused products, prepared food (i.e. baked goods, hot meals, gas station pizza, etcetera), and tobacco.
The specific definition of 'food and food ingredients' for exclusion from the state sales tax is as follows:
"Food and food ingredients" means substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value. Food and food ingredients shall include bottled water, candy, and soft drinks. Food and food ingredients shall not include:
a. alcoholic beverages,
b. dietary supplements,
c. marijuana, usable marijuana, or marijuana-infused products,
d. prepared food, or
e. tobacco;
Below are press releases from House Speaker Charles McCall, Gov. Stitt, and State Sen. Daniels, along with Senate Pro Tem Greg Treat's announcement from yesterday that the Senate would be taking up the bill.
OKLAHOMA CITY – Speaker Charles McCall, R-Atoka, today issued a statement following the final passage of House Bill 1955, by McCall, which eliminates the state's portion of the grocery tax, through the Oklahoma Senate by a vote of 42-2. The bill was passed by the House 11 months ago, and has been awaiting a vote in the Senate along with an income tax cut.
"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 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."
OKLAHOMA CITY (February 22, 2024) - Today, Governor Kevin Stitt released the following statement celebrating the passage of HB 1955, cutting the state grocery tax:
"Today, we get to fulfill a promise to all four million Oklahomans and pass the largest single year tax cut in Oklahoma history. Cutting the grocery tax means relief for all Oklahomans.
"I’ve called for tax cuts since 2019 and in 2022 I called a special session specifically to cut the grocery tax. I want to thank Speaker McCall and the House for tirelessly fighting for tax cuts, and to Pro Tem Treat and the Senate for sending this to my desk.
"I’m going to always fight for limited government and lower taxes, and I will still advocate to get us on path to zero income tax. This is a victory I’m excited to celebrate."
OKLAHOMA CITY – On Thursday, the Senate voted to eliminate the 4.5 percent state sales tax on groceries. The bill had already passed the House. It now heads to the Governor’s desk.
“Eliminating the state sales tax on groceries will bring much-needed tax relief to Oklahomans reeling from inflated prices, due to bad policies in Washington, D.C. They will start to benefit this year and every time they purchase groceries," Daniels said. “It was important to make this decision now so we can move ahead crafting the state budget as that must be done by the end of May.”
The tax cut is estimated to save each Oklahoman an average of $104.25 per year. It will reduce state revenue by $418,000,000 per year.
Grocery items are defined in the bill. Local and county sales taxes on groceries will still be collected. Any municipality seeking to propose a sales tax increase to local voters will have to wait until after July 2025 to do so.
Daniels served on the senate tax reform task force created in 2021. "I am committed to continuing to work to implement tax reform, which I believe is critically important to the long-term prosperity of Oklahomans and our ability to attract new business to our state," Daniels said.
OKLAHOMA CITY - Senate Pro Tem Greg Treat, R-Oklahoma City, today announced the Senate will put the grocery tax cut up for a vote on the Senate floor tomorrow.
“I have long been an advocate for giving Oklahomans relief at the grocery store,” Pro Tem Treat said. “Our caucus had a robust, and lengthy debate over where and how to cut taxes for Oklahomans. While there were many good ideas and different ways to cut taxes we discussed, the caucus has collectively coalesced around cutting the state portion of the grocery tax. Once signed into law and after it takes effect, this will give Oklahomans relief every time they purchase groceries. This legislation is common sense and will help everyone.
“To be clear - this is the only tax relief the Senate will be seeking this year. To ensure state services and recent critical investments in education and infrastructure remain intact in the long and short term, there is no way to do more at this time. I appreciate my Senate colleagues who have worked on this issue for months and who also agree this is the best path forward. We have done a tremendous job of holding the line and not giving in to cheap political wins or rhetoric that would have put the state on the wrong fiscal path.”
Eliminating the state portion of the grocery tax will save Oklahoma taxpayers nearly $400 annually. If signed into law, the anticipated effective date would around the end of August.
According to estimates, eliminating the grocery tax would save average Oklahomans 5.5 times more money than a 0.25% income tax cut.
“This is the most beneficial piece of legislation that will impact the most Oklahomans in our state,” Pro Tem Treat continued. “This gives real relief this year. I look forward to voting on this measure tomorrow morning and seeing the governor sign it into law.
[UPDATED 3/1/24 to add the follow]
Speaker McCall Celebrates Signing of House Grocery Tax Bill
OKLAHOMA CITY (Feb. 27th) – Speaker Charles McCall, R-Atoka, today issued a statement following Gov. Stitt's signing of House Bill 1955, by McCall, which eliminates the state's portion of the grocery tax.
"Today is a day that has been a year in the making and it could not have come soon enough for the citizens of Oklahoma," McCall said. "House Bill 1955 eliminates the state portion of the grocery tax, which sits at 4.5%, and will save Oklahomans hundreds of dollars each year on their grocery bills. Inflation is higher than at almost any other point in our nation's history, and Oklahomans are feeling that the most through the price of their groceries. I am proud of the House for leading this effort to cut the grocery tax, and thankful that Oklahomans are close to receiving the relief they so desperately need."
The bill, which will go into effect 90 days after sine die adjournment of the Legislature, cuts the state's portion of the grocery tax and includes a two-year moratorium on local grocery and sales taxes that prohibits cities from increasing those through June 2025.
"Eliminating the state's portion of the grocery tax is a good first step towards helping ease the burden of inflation on Oklahomans, but it is not the only step needed to truly help our citizens," McCall said. "The Senate is currently in possession of a number of House bills that would cut income taxes and change the tax structure of our state to be more favorable to our taxpayers. These bills are equally as important, if not more so, than cutting the grocery tax, and they deserve to be heard and put up for a vote in the Senate. In addition to bills already sent to the Senate, I have filed a number of tax relief measures this year that the House will be sending over as well. The Senate passed the grocery tax cut by a vote of 42-2. To me, that signals that the members of that body are supportive of tax relief for Oklahomans. If that is the case, they should put these other important tax relief bills up for a vote and send them to the governor's desk immediately."
Woods Pleased with Signing of Bill Eliminating State Sales Tax on Groceries
OKLAHOMA CITY (Feb. 27th) – Sen. Tom Woods, R-Westville, commends the recent signing of House Bill 1955 by Gov. Kevin Stitt. The bill, which eliminates the state portion of the sales tax on groceries, passed off the Senate floor with a vote of 42 to 2 including support from Woods.
“I am thrilled to see Governor Stitt sign House Bill 1955 into law, eliminating the state sales tax on groceries,” Woods said. “This measure will directly benefit all Oklahomans by alleviating the financial burden of rising costs and providing much-needed relief at the grocery store.”
The bill, which eliminates the 4.5 percent state sales tax on groceries, aims to address the economic challenges faced by Oklahoma residents and ensure greater financial stability for families across the state. By removing this tax burden, Oklahoma families are expected to save an average of $700 per year, providing much-needed relief in the face of inflationary pressures.
"I commend Governor Stitt and my colleagues in the Legislature for their efforts in passing and signing this important bill,” Woods said. “Eliminating the state sales tax on groceries is a significant step towards improving the financial well-being of our constituents and fostering economic growth in our state.”
HB 1955 will go into effect sometime in August.
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