Starting Wednesday, the state’s portion of the grocery sales tax will be eliminated. State lawmakers expect the 4.5% tax cut will save Oklahoma families up to $900 annually.

“The biggest impact we can have on Oklahomans’ wallets and help them weather this record inflation is by eliminating the state portion of the grocery tax. That will take effect on August 29,” said Republican Senator pro tempore from Oklahoma Greg Treat.

HB1955 was passed during the 2024 legislative session, but lawmakers gave grocery stores across the state 90 days to adjust their prices before the law went into effect.

The tax cut will affect anything typically considered “supermarket food” or anything packaged by a manufacturer with fresh and raw food.

Some examples include milk, baby food, fruits and vegetables, chips and frozen meals.

Items such as alcohol, pet food, vitamins, toiletries and prepared meals, including hamburgers, hot dogs and fried chicken, will continue to be taxed.

The new law also will not affect local taxes on groceries. State lawmakers recognize that the grocery tax is the largest category of sales taxes collected by municipalities and say they do not want to impact that cash flow.

“Almost all of Oklahoma’s cities rely on sales tax, so we didn’t want to take away the lifeline of their police departments, fire departments and road maintenance,” said Pro Tem Treat.

A full list of products that are and are not exempt from the tax reduction can be found HERE.

The Oklahoma Tax Commission has also created a question and answer forum, which can be found HERE.