Revised March 22, 2005



PDF of this report

Related Reports

If you cannot access the files through the links, right-click on the underlined text, click "Save Link As," download to your directory, and open the document in Adobe Acrobat Reader.

Forty-five states and the District of Columbia levy general sales taxes.  Most of those states have in some way eliminated, reduced, or offset the tax as applied to food for home consumption.  The relief strategies include full or partial exemptions from the sales tax for food purchased for home consumption and credits or rebates to offset the food tax.  Of the states with sales taxes:

Local governments, which in many states levy their own sales taxes, usually follow state policy on the food exemption.  Major exceptions include localities in Arizona, Colorado, Georgia, Louisiana and North Carolina.  Grocery food purchases in those states are fully or partially exempt at the state level, but typically taxed at the local level. 

For more details on food tax exemptions and credits, see Nicholas Johnson and Iris J. Lav, Should States Tax Food? Examining the Policy Issues and Options, Center on Budget and Policy Priorities, May 1998.

End Notes:

[1]  Hawaii formerly offered a food tax credit; it was repealed effective tax year 1999 and replaced with a slightly larger tax credit targeted to low-income families that is no longer explicitly labeled a food tax credit.