TULSA, Okla. — Shoppers will soon see some relief at the grocery store.
On Feb. 27, Governor Kevin Stitt signed the grocery tax cut into law. It means shoppers will no longer pay state taxes on groceries.
“Just a few more dollars to put in my baby’s savings account for college fund, or even for he and his little friend to have a pizza,” said Renee Peterson.
Peterson had a little extra cheer Tuesday, learning the state grocery tax is going away soon. She said the extra money will be put to good use.
State lawmakers and Stitt are hoping that’s a reality for many families across Oklahoma. Stitt signed the bill into law Tuesday morning.
“The largest single-year tax cut in Oklahoma history,” he said.
“It’s the tax that will impact more Oklahomans than any other tax we can potentially address,” said Senate Pro Tem Greg Treat.
It's something Stitt's been fighting to change for years.
Starting at the end of August, shoppers will no longer have to pay state grocery tax on food and food ingredients— saving 4.5%.
There are some exceptions, including alcohol, dietary supplements, marijuana, tobacco, and prepared foods, meaning hot items at the grocery store.
“It’s very helpful for me,” said Nicole Bethel.
Bethel said she’s seen prices fluctuate at the store, “You come here one day, and you may see something for $1.49, then it’s $2.49, so the prices are jumping pretty high."
She said the tax cut provides some needed relief.
“You have to look at it like, well, ‘I gotta put this back. I gotta put this back.’ Then you gotta compromise for what you’re buying,” said Bethel. “Now that this is going on, we should be able to shop and get what we want.”
Shoppers still have to pay the city and/or county portion of the grocery tax.
In Tulsa, the city tax is 3.65%.
"I support the elimination of the state grocery sales tax. I think it is important to note that the city sales tax on groceries will remain. Cities in Oklahoma are almost entirely reliant on sales tax to fund operations, and the vast majority of the City of Tulsa’s operational funding goes toward public safety. If we eliminated the sales tax on groceries at a city level, it would have a catastrophic impact on Police and Fire Department staffing. The state has other funding mechanisms at their disposal (income tax, property tax, etc.), so eliminating this specific one tax is more manageable for them," said Tulsa Mayor G.T. Bynum.
Overall, the law could save shoppers about $400 a year.
“I really do take those extra dollars, those pennies that turn into dollars and I go and put $10, $15, $20 in his college fund so it doesn't impact only now, but the future,” said Peterson.
The bill also comes with a yearlong moratorium, so cities can’t raise their portion of the grocery tax until June 2025.
"I also agree with the ban on cities passing sales tax increases to make up the gap when this state tax ends. I have never supported a tax increase and think such a ban will allow the intended cost relief for working families without introducing any temptation for local governments." said Tulsa Mayor G.T. Bynum.
Before this Oklahoma was one of only 13 states across the country that taxed groceries and one of only five states that taxed groceries at the maximum rate.
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