Starting from January 1, 2025, residents of Kansas can rejoice as they will no longer be burdened with state sales tax on groceries. While city and county taxes will still apply, the existing state tax of 2% will be completely eliminated.
This move aims to alleviate the financial strain on Kansans and make essential food items more affordable for everyone.
In 2022, a new law was passed with the aim of gradually reducing Kansas’ sales tax on groceries over a span of three years. At the time the law was implemented, the state’s sales tax on groceries stood at 6.5%.
The first step in this plan was taken in 2023, when the tax rate was lowered to 4%. The following year, in 2024, the tax rate was further reduced to 2%.
This initiative was introduced in response to the fact that Kansas had one of the highest food sales taxes in the country, ranking second only to Mississippi, which had a 7% tax rate.
City and county grocery taxes will still apply, with rates varying across different counties. These taxes can range from 0% in 11 counties to a high of 2.25% in Sherman County.
Most counties have grocery taxes ranging from 0.01% to 2%. Interestingly, twelve counties have a grocery tax rate higher than 2%.
Considering that the average monthly household expenditure on groceries is approximately $500, it is estimated that the average household in Sherman County would pay around $11 per month in grocery tax.
This amount is significantly lower compared to the estimated $34 per month that they would have paid in 2022.
According to health psychologist Nancy Hamilton, low-income communities bear the brunt of regressive taxes, including the burden of the food sales tax.
Hamilton stated that removing sales tax on food would have a more significant impact on individuals with lower incomes. This is because they allocate a higher percentage of their earnings towards essential items like food.
According to the Kansas Health Institute, the tax not only had a negative financial impact on low-income Kansans, but it also affected their health.
According to the experts, taxes play a significant role in shaping the financial dynamics of the food system. They have a direct impact on household purchasing power and consumer behavior, as well as community health and nutrition.
The bipartisan-supported 2022 law sailed through the Senate unanimously and garnered an overwhelming majority in the House. Governor Laura Kelly hailed the tax cut as a victory for the people of Kansas, acknowledging their concerns about rising food prices.
Food prices experienced a 9.9% increase when the law was passed. However, in 2023, they only rose by 5.8%.
Kelly emphasized the significant impact of a 6.5% reduction in the cost of food for individuals, stating that it would greatly benefit many people. According to our calculations, the average family of four could save over $500 per year simply by eliminating sales tax.
