Oklahomans will soon get a little wiggle room in their grocery budget.
The Senate on Thursday overwhelmingly agreed to send House Bill 1955, a carryover bill from 2023 that eliminates the 4.5% state portion of the grocery sales tax, to Gov. Kevin Stitt’s desk. Stitt, who has vowed to sign any tax cut legislation that reaches his desk, celebrated the news on X.
The measure, which is expected to have a $418 million annual fiscal impact, should take effect in late August. Municipalities will retain their authority to tax groceries and food items.
Senate Pro Tem Greg Treat, R-Oklahoma City, said last month his caucus was open to tax cuts, but first wanted to receive final budget projections from the state Board of Equalization. After that report came back with a positive outlook, Treat said he settled on a grocery tax cut because it would provide quick relief to the largest swath of Oklahomans.
“Some choose to look at it as $418 million in revenue lost,” Treat said on the Senate floor, referencing the proposal’s anticipated annual fiscal impact. “But I ask you to look at it as $418 million that Oklahomans get to keep in their pockets.”
Just two Senators, Roger Thompson, ROkemah, and Mary Boren, D-Norman, voted against the measure. Thompson, who chairs the Senate Appropriations Committee, said he fears long-term consequences of the cut should the state face an economic downturn.
“I believe it looks better on a bumper sticker than it does in the same budget,” Thompson said.
Oklahoma is one of 13 states to impose a tax on groceries. Of those 13 states, eight have a reduced tax rate for food items, according to the AARP.
Opponents of the grocery sales tax have long argued that it disproportionately burdens the poor and middle class who spend a greater portion of their income on groceries. While proposals to cut the state grocery sales tax have been considered for several years, and often garnered bipartisan support, concerns about the long term effects of cutting the revenue source stalled progress.
House Speaker Charles McCall, R-Atoka, and Minority Leader Cyndi Munson, DOklahoma City, praised the Senate’s action in separate media statements. McCall urged the Senate to also cut state income taxes, though Treat has stated the Senate will not take up any more tax cut proposals this session.
“There is continued work to be done to give Oklahomans back more of their hard-earned money,” McCall said in the statement. “While the grocery tax is a good first step, it is not the only action needed to accomplish that goal. The House always knew this legislation would pass if put up for a vote, and we feel the same way about the .25% income tax cut.”
“Oklahoma Watch, at OklahomaWatch.org, is a nonprofit, nonpartisan news organization that covers public-policy issues facing the state.”
