'Largest single year tax cut in Oklahoma history:' Gov. Stitt signs state grocery tax elimination into law
Governor Kevin Stitt has officially signed a total elimination of the state grocery tax into law.
OKLAHOMA CITY (KFOR) — Governor Kevin Stitt has officially signed a total elimination of the state grocery tax into law.
The House passed a bill that would eliminate the state grocery tax during the 2023 legislative session, but the Senate didn’t move on it.
The proposal would not only eliminate the state tax, but also put a moratorium on local grocery and sales taxes that would prohibit cities from increasing those through June 2025.
The House’s version of this tax cut would also take effect immediately once signed into law.
On Thursday, the Senate decided to drop the emergency clause that would have provided immediate relief.
“The reason we didn’t do the emergency – there’s some ramp up time for these vendors, these stores, these privately owned grocery stores to be able to change their systems, to be able to accommodate this, and also for the tax commission to promulgate rules. It just made sense,” previously said Pro Tem Treat.
With the delay in the tax cut being enforced, Speaker of the House Charles McCall (R-Atoka) said it will cost Oklahomans an additional $200 million.
The delay in the vote cost Oklahomans an estimated additional $374 million in taxes, and the lack of an emergency to immediately put the cuts in place will cost our citizens another $200 million, but Senate leadership did their best to at least secure passage. The House has sent several tax cuts to the Senate over the last three years only to have them stall and not be heard. Thankfully this legislation has finally passed after 332 days of waiting. Oklahomans are currently facing some of the worst inflation of the last three decades, and the Senate’s vote today means that help is finally on the way.
Speaker of the House Charles McCall (R-Atoka)
The state’s revenue is projected to decrease by $418 million with the state grocery tax cut.
The tax cut would save Oklahomans $700/year, according to Pro Tem Treat. It would account for slightly more than $13/week.
With the proposal passing both the House and Senate, it went to the Governor's desk for a signature Tuesday morning.
"There are 13 states that tax groceries. To us in leadership, the grocery tax was one of the most regressive tax we have," said Gov. Stitt. "Since 2019, I've been talking about eliminating this grocery tax. I get to deliver on that promise today by signing the largest single year tax cut in Oklahoma history."
Additionally to having been one of 13 states to tax groceries, Oklahoma is one of five to tax those goods at maximum. Oklahoma's current grocery sales tax is 4.5%.
"This has been a long time coming and I'm excited we were able to deliver on this promise," said Pro Tem Treat.
Speaker McCall, House Minority Leader Rep. Cindy Munson (D-OKC), and Senate Minority Leader Sen. Kay Floyd (D-OKC) all echoed the same excitement.
Goods not prepared at the grocery store will not have a state sales tax attached, but food prepared and/or made in the grocery store will be taxed.
Although the Governor signed the elimination into law, it will not go into effect until 90 days after the legislative session adjourns for the year.
The earliest Oklahomans could see the tax cut is by the end of August.
“Eliminating the state sales tax on groceries is a significant step towards improving the financial well-being of our constituents and fostering economic growth in our state.”
Senator Tom Woods (R-Westville)
While the Governor and Speaker McCall are hopeful for a personal income tax cut of .25% this year, Pro Tem Treat said the grocery tax elimination will be the maximum tax relief Oklahomans will see this year.
The Pro Tem said the state's revenue needs to be higher than what it is for a second tax cut to be considered.