The state of Oklahoma is poised — on Thursday — to eliminate its 4.5% tax on groceries. That doesn’t mean grocery sales will be totally tax-free.
City and county taxes, like the city of Tulsa’s 3.65% sales tax, will still be charged. They’re important because, according to the city’s 2024-25 fiscal year budget , they account for more than one-third of revenue taken in each year by the city and help to pay for vital services such as police protection and road maintenance.
Tulsa County collects a 0.367% sales tax. But consumers undoubtedly will see savings.
If a family typically spends $1,000 a month on groceries, it should save about $540 in the coming year. The state tax won’t be eliminated on everything that gets sold in a grocery store. For example, it will still be charged on purchases of things like medicines or supplements found on a pharmacy aisle.
It’ll still be charged on sales of tobacco products, six-packs of beer or bottles of wine. The tax will still be applied, too, for purchases of things like ready-to-eat deli chicken or “grab-and-go” pasta salad. A cake made in a grocery store bakery will still be subject to the state tax, but a cake made by an outside vendor, boxed and shipped ready to be sold from a frozen foods section, will not.
Emily Haxton, the press liaison at the Oklahoma Tax Commission, said the state’s sale tax will be eliminated across the broad categories of “food and food ingredients” while it will still be applied to “prepared food.” “If it’s made by the grocery store, it’s not exempt, but if it’s made by a brand-name food manufacturer, it is,” she said. To help consumers to understand how the tax cut will apply to them, and to help businesses to prepare for the change, the Oklahoma Tax Commission has updated its website with a comprehensive guide , including a short video and answers to frequently asked questions.
For some businesses, like food trucks, that market both prepared food and grocery store-style packaged food, such as those that sell sandwiches ready to eat along with bags of chips and bottles of soda pop, a formula can be applied. According to the Tax Commission’s help guide, if prepared food makes up 75% or more of a business’s total sales, then all food sold will be taxable as prepared food, with the exception of sales of larger packages containing four or more servings. At Braum’s Ice Cream and Dairy Stores, Public Relations Director Amanda Beuchaw said the company has a system in place that allows it to adapt quickly to any changes made in local or state tax collection rates.
“Each state routinely provides notifications of upcoming sales tax changes,” she said in an email. “We monitor these changes for those affecting the sales tax rate we collect by location and for changes to product taxability.” Beuchaw said Braum’s maintains a database of products available at its stores along with the associated taxability of each product.
“Our systems allow us to modify the sales taxes charged by location and product,” she said. “We are addressing this (Oklahoma-wide) change in the same manner as more routine tax changes, but with more locations than usual being affected.” Beuchaw said the state has provided substantial guidance to help businesses identify products that it defines as groceries eligible for the decreased sales tax rate.
On Feb. 28, when Gov. Kevin Stitt signed House Bill 1955 into law, eliminating the state’s tax on groceries, he hailed it as the biggest single-year tax cut in Oklahoma history.
According to reporting by personal finance magazine Kiplinger, in recent years Oklahoma has been among only 13 states to collect a tax on grocery sales, though some states have provided tax credits to benefit lower-income consumers. In Oklahoma, for example, tax exemptions have been allowed on groceries paid for with food stamps. The Tulsa World is where your story lives.
