Sales Tax on Food by State: Where Is It Lower in the USA? (2026)

In short: Sales tax on food in the US depends on the state and on how the food is sold. Most states exempt groceries from state sales tax, but in October 2026 eight states still tax them at the state level, often at a reduced rate. Prepared food, hot food and restaurant meals are taxable almost everywhere, even where groceries are not. Sales tax on food is lower in the USA where states exempt groceries from both state and local tax.

Updated October 2026: We added where food sales tax is lowest, why some states still tax groceries (including income tax trade-offs and South Dakota's 2024 ballot measure), a worked example and common mistakes.

Sales tax on food varies widely across the United States. Many states treat basic groceries as exempt. Others apply full or reduced rates, and local governments can add their own taxes. For earlier rate changes, see US sales and local tax rate updates 2024 and VAT & Sales Tax Updates: September 2025.

If your business sells food, you need to know when to charge sales tax. This guide explains how each state treats groceries, prepared food, candy and soft drinks.

Is food taxable in the US?

It depends on what the food is, where you sell it and how it's sold. The key question is whether the food is for home preparation or for eating right away. Here's how states generally treat each type:

• Groceries: Staple food such as bread, dairy, fruit and vegetables. Most states exempt them or apply a reduced rate.
• Prepared food: Hot food, food the seller mixes or heats, and food sold with utensils. Usually taxable.
• Restaurant meals: Taxable in almost every state with a sales tax, sometimes at a higher meals rate.
• Bakery items: Often exempt when sold as groceries. Taxable when sold hot, for eating on-site or with utensils.
• Convenience store food: Packaged groceries are often exempt. Ready-to-eat or heated food is usually taxed.
• Candy, soft drinks and dietary supplements: Often taxed at the full rate, even in states that exempt groceries.
• Alcoholic beverages: Taxable, and often subject to extra excise taxes.

Purchases paid for with SNAP (food stamp) benefits are exempt from sales tax in every state under federal law.

Which states tax groceries in 2026?

Eight states still apply a state-level tax to groceries as of October 2026. Several others exempt groceries from state tax but let local taxes apply.

States where groceries are exempt from state tax but local taxes can apply include Arkansas, Arizona (some cities), Colorado (some local governments), Georgia, Illinois (1% local option), Kansas, Louisiana, North Carolina (2%), Oklahoma, South Carolina (some local taxes) and Virginia (1%). Alaska has no state sales tax, but some local governments tax food.

What changed in grocery taxes in 2024–2026?

Several states have cut or ended their state grocery taxes in the last two years:

Tennessee considered ending its grocery tax in 2026, but the bills did not pass. South Dakota voters rejected a grocery tax repeal in November 2024.

What counts as prepared food?

Prepared food is generally food the seller has heated, combined or served ready to eat. Many states, including members of the Streamlined Sales Tax agreement, use a three-part definition. Food is prepared food if it is:

1. Sold hot, or heated by the seller
2. Made of two or more ingredients mixed or combined by the seller and sold as one item
3. Sold with eating utensils provided by the seller, such as plates, forks or straws

Exceptions vary. For example, many states exempt bakery items, or food the seller only cuts or repackages. Check each state's own rules before you set up your tax codes.

How is food taxed in each state?

The list below covers grocery tax and prepared food rules in each state and Washington, D.C.

Alabama

• Groceries: 2% state rate since September 1, 2025 (down from 3%), plus local taxes.
• The state tax on food was suspended from May 1 to June 30, 2026, and returned on July 1, 2026. Local food taxes applied throughout.
• Prepared and hot food: Taxable at the full rate.

Alaska

• No state sales tax.
• Some local jurisdictions tax food, including groceries and prepared meals.

Arizona

• Groceries: Exempt from state tax. Some cities tax food for home consumption.
• Prepared food, restaurant meals and food sold hot: Taxable.

Arkansas

• Groceries: Exempt from state tax since January 1, 2026 (previously 0.125%). Local sales taxes still apply.
• Prepared food: Taxable at the full rate.

California

• Groceries: Exempt.
• Hot food and meals sold with eating utensils: Taxable.
• Bakery items: Exempt unless sold hot, for eating on-site or with utensils.

Colorado

• Groceries: Exempt from state tax. Some local governments tax them.
• Prepared food and restaurant meals: Taxable.

Connecticut

• Groceries: Exempt.
• Prepared meals and hot or ready-to-eat food: Taxable, with a higher rate on meals than the general rate.

Delaware

• No sales tax.
• Sellers pay a gross receipts tax instead.

District of Columbia

• Groceries: Exempt.
• Restaurant meals and prepared food: Taxable at a higher rate than the general rate.

Florida

• Groceries: Exempt.
• Prepared meals, hot food and vending machine food: Taxable.

Georgia

• Groceries: Exempt from state tax. Local sales taxes generally apply.
• Prepared food, including food heated by the seller: Taxable.

Hawaii

• No sales tax, but a general excise tax (GET) applies to most sales.
• Groceries: Subject to the 4% GET plus any county surcharge. No grocery exemption.

Idaho

• Groceries: Taxable at the full 6% rate. Residents can claim a grocery credit on their income tax return.
• Prepared food and restaurant meals: Taxable.

Illinois

• Groceries: No state grocery tax since January 1, 2026 (previously 1%). Cities and counties can impose a 1% local grocery tax by ordinance.
• Prepared food, candy and soft drinks: Taxable at the general rate (6.25% state plus local).

Indiana

• Groceries: Exempt.
• Prepared food and items sold with eating utensils: Taxable.

Iowa

• Groceries: Exempt.
• Hot food, prepared meals and food eaten on-site: Taxable.

Kansas

• Groceries: 0% state rate since January 1, 2025. Local sales taxes still apply.
• Prepared food and restaurant meals: Taxable.

Kentucky

• Groceries: Exempt.
• Prepared and ready-to-eat food: Taxable.

Louisiana

• Groceries: Exempt from state tax. Local sales taxes generally apply.
• Prepared meals: Taxable.

Maine

• Groceries: Exempt.
• Prepared food, including rotisserie chicken and food sold hot: Taxable.

Maryland

• Groceries: Exempt.
• Prepared food, including food heated by the seller or sold for immediate consumption: Taxable.

Massachusetts

• Groceries: Exempt.
• Restaurant meals, hot food and food eaten on-site: Taxable under the meals tax.

Michigan

• Groceries: Exempt.
• Prepared food, including food sold hot or with utensils: Taxable.

Minnesota

• Groceries: Exempt.
• Prepared food: Taxable, including food sold hot or ready to eat without further preparation.

Mississippi

• Groceries: 5% reduced state rate since July 1, 2025 (down from 7%).
• Prepared food: Taxable at the full 7% rate.

Missouri

• Groceries: 1.225% reduced state rate, plus local taxes.
• Prepared meals and restaurant food: Taxable at the full rate.

Montana

• No general sales tax.
• Some resort areas charge a local resort tax that can apply to food and meals.

Nebraska

• Groceries: Exempt.
• Prepared meals: Taxable.

Nevada

• Groceries: Exempt.
• Prepared food: Taxable if sold hot or with utensils.

New Hampshire

• No general sales tax.
• Restaurant meals and prepared food: Taxed at 8.5% under the meals and rooms tax.

New Jersey

• Groceries: Exempt.
• Prepared meals, hot food and food sold with utensils: Taxable.

New Mexico

• Groceries: Generally deductible from gross receipts tax when sold by a qualifying food retailer.
• Prepared meals: Taxable.

New York

• Groceries: Exempt.
• Prepared food, hot food and food sold with utensils: Taxable.

North Carolina

• Groceries: Exempt from state tax. A 2% local tax applies.
• Prepared meals: Taxable at the full rate.

North Dakota

• Groceries: Exempt.
• Restaurant meals and prepared food: Taxable.

Ohio

• Groceries: Exempt.
• Prepared food and food for immediate consumption: Taxable.

Oklahoma

• Groceries: Exempt from state tax since August 29, 2024. Local sales taxes still apply.
• Prepared food: Taxable.

Oregon

• No sales tax.

Pennsylvania

• Groceries: Exempt.
• Prepared food, including food heated by the seller or sold with utensils: Taxable.

Rhode Island

• Groceries: Exempt.
• Prepared food and bakery items sold hot or ready to eat: Taxable.

South Carolina

• Groceries (unprepared food): Exempt from state tax. Some local taxes may apply.
• Restaurant meals and ready-to-eat food: Taxable.

South Dakota

• Groceries: Taxable at the full 4.2% state rate, plus municipal taxes. The state rate is due to return to 4.5% on July 1, 2027.
• Prepared meals: Taxable.

Tennessee

• Groceries: 4% reduced state rate, plus local taxes. Bills to remove it in 2026 did not pass.
• Prepared food, candy and soft drinks: Taxable at the full 7% state rate plus local.

Texas

• Groceries: Exempt.
• Prepared food, hot food and food sold with utensils: Taxable.

Utah

• Groceries: 3% combined statewide (1.75% state + 1% local + 0.25% county).
• Prepared meals: Taxable at the full rate.

Vermont

• Groceries: Exempt.
• Prepared food, including bakery items for immediate consumption: Taxable under the meals tax.

Virginia

• Groceries: 1% local tax statewide; no state portion since January 1, 2023.
• Restaurant meals and prepared food: Taxable at the full rate.

Washington

• Groceries: Exempt.
• Prepared food, hot food and convenience store meals: Taxable.

West Virginia

• Groceries: Exempt.
• Prepared meals: Taxable.

Wisconsin

• Groceries: Exempt.
• Prepared food, including food heated by the seller or sold with utensils: Taxable.

Wyoming

• Groceries: Exempt.
• Prepared meals: Taxable.

Where is sales tax on food lower in the USA?

Sales tax on food is lowest in states with no sales tax at all and in states that exempt groceries from both state and local taxes. These include:

• No general sales tax: Delaware, Montana, New Hampshire and Oregon. Alaska has no state sales tax, though some local governments tax food. See the states with no sales tax.
• Full grocery exemption: Most states, such as California, Florida, New York, Pennsylvania and Texas, exempt groceries from both state and local taxes.

The highest state-level grocery taxes are in Idaho (6%), Mississippi (5%), South Dakota (4.2%), Hawaii (4% GET) and Tennessee (4%). Local taxes can raise the combined sales tax rate further. Prepared food and restaurant meals are taxed at full state and local sales tax rates nearly everywhere. For general state tax rates, see which states have the highest and lowest sales tax rates.

For a European comparison, many EU countries apply reduced VAT rates to food. See 8 Fun Facts About VAT in Europe.

Why do some states still tax groceries?

Grocery taxes bring in steady tax collections, so states that cut them must replace the money or cut spending. That is why grocery tax changes often travel with income tax changes.

• Idaho taxes groceries at the full 6% rate but gives residents a grocery credit on their individual income tax return. H.B. 231 (2025) raised the credit to $155 per person (Idaho Legislature, H.B. 231 statement of purpose).
• Mississippi cut its grocery rate from 7% to 5% on July 1, 2025, under House Bill 1 (Mississippi Department of Revenue notice 72-25-03). The same law also starts phasing down the state income tax, from 4% to 3.75% in 2027 (Thomson Reuters).
• South Dakota voters rejected Initiated Measure 28, a ballot measure to end the state sales tax imposed on groceries, on November 5, 2024 (SDPB). South Dakota has no individual income tax, so it relies heavily on sales tax.
• Tennessee also has no broad individual income tax and keeps a 4% state rate on groceries.

How much sales tax would a grocery order cost?

The same basket can carry very different tax depending on the state. Take a $200 grocery order with no prepared food:

Add a $20 hot prepared meal in Mississippi and that item is taxed at the full 7% rate, or $1.40. Local taxes can add more in each state.

What are common food sales tax mistakes?

• Treating all food the same. Candy, soft drinks and hot food are often taxable even where groceries are exempt.
• Ignoring local grocery taxes. In Illinois, Kansas, Arkansas and Oklahoma, the state rate is 0% but local taxes can still apply.
• Missing effective dates. Alabama suspended its state food tax from May 1 to June 30, 2026, then brought it back.
• Charging tax on SNAP purchases. Federal law exempts them in every state.

What does sales tax on food mean for businesses?

Any business that sells food must apply the right rate to each item in each state. This matters most when you sell across states or online.

What should food businesses consider?

• Nexus: If you have economic nexus or a physical presence in a state, you may need to register and collect sales tax there. See our guide to economic nexus by state.
• Product classification: Separate exempt groceries from taxable prepared food, candy, soft drinks and items sold with utensils.
• Local rates: Where local governments tax groceries, the rate depends on the city or county. Use the state's rate lookup tools.
• Online and marketplace sales: Marketplace facilitators collect sales tax on marketplace orders. You remain responsible for sales through your own website.
• Rate changes: Grocery tax rates change often. Update your point-of-sale and ecommerce tax settings on each effective date.

How should a food seller set up sales tax?

1. List the states where you have nexus.
2. Classify each product: grocery, prepared food, candy, soft drink, supplement or alcohol.
3. Check each state's treatment and the local rates for the places you deliver to.
4. Register for a sales tax permit in each state where you must collect.
5. Configure your systems, collect the tax and file returns on time.

What should you remember about sales tax on food?

Most states exempt groceries, but eight still tax them at the state level, and local taxes apply in many more. Prepared food, hot food and restaurant meals are taxed almost everywhere. Whether you sell in a convenience store, a restaurant or online, check each state's rules and watch for changes.

Selling food in several states? LumaTax by Taxually helps enterprises and accounting firms with US sales tax registration and filing. Book a free call with one of our sales tax experts to discuss your setup.

Sources

• Alabama Department of Revenue: State rate reduced on food from September 1, 2025
• Alabama Department of Revenue: Temporary suspension of state food tax (Act 2026-604)
• Illinois Department of Revenue: CA-2026-01, local grocery tax from January 1, 2026
• Mississippi Department of Revenue notice 72-25-03: New 5% sales tax rate on groceries
• Idaho Legislature: H.B. 231 (2025) grocery credit statement of purpose
• SDPB: South Dakota voters reject grocery tax repeal (IM 28)
• Kansas Department of Revenue: Food sales tax rate reduction (KS-1223)
• Utah State Tax Commission: Combined sales and use tax rates (food rate)
• Arkansas Department of Finance and Administration: grocery tax repeal effective January 1, 2026

How Taxually handles this

Taxually’s LumaTax runs a nexus analysis on your sales, helps you register in the states where you must collect, and prepares and files multi-state sales tax returns, including Canadian GST/HST. LumaTax is currently available to enterprises and accounting firms. For the full workflow, read how to automate US sales tax filing in every state.

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