America First Policy Institute Releases New Report on Grocery Sales Tax

Washington, D.C. – The America First Policy Institute (AFPI) has released it’s newest report on the cost of groceries: Repealing Grocery Taxes to Ease Cost Pressures on Working Families.

Over the last four years, grocery prices surged dramatically, adding significant strain on American families already burdened by decades-high inflation and the rising cost-of-living. While the Trump Administration has successfully lowered energy prices and is actively pursuing regulatory reforms to lower food prices, experts caution that global disruptions and unforeseen events could drive prices even higher. AFPI’s latest paper explores ways that government officials in almost a dozen U.S. states could provide immediate relief to their citizens.

“By eliminating grocery taxes on essential food items, states could deliver immediate relief to families struggling with the high prices of everyday necessities,” said Tate Bennett, AFPI’s Director of Rural Policy. “The idea has bipartisan support, as over two thirds of states do not impose these taxes and governors of both political parties have approved repeals in recent years. The remaining dozen states that maintain grocery taxes should follow suit and eliminate them permanently in their upcoming legislative sessions.”

As highlighted in AFPI’s research report, studies show that meals prepared at home are generally healthier than take out meals, and repealing grocery taxes will financially incentivize home-cooked meals. For families, this shift would be essential as it would allow them to provide healthy meals for their growing children.

“As a mother of five active children, keeping them well-fed on a budget has been a struggle. For moms in states with grocery sales taxes, a repeal would mean far more to them than the minimal impact this would have on state budgets,” said Kayleigh Kozak, AFPI Family First Campaign Director.

Opponents have raised strong objections, arguing that eliminating grocery taxes creates special carve-outs for the food industry and deprives state and local governments of critical revenue. However, unlike other consumption taxes, where buyers can choose whether or not to spend, no family can opt out of purchasing the staples of life: nourishing food and essential ingredients.

In states that have repealed grocery taxes, the impact has been both tangible and immediate, as in Illinois, which saved shoppers $360M in the first year of repeal. And amidst soaring grocery prices post-COVID, grocery tax repeals have proved overwhelmingly popular, a strong indication that citizens appreciated the measurable reduction to the burden that governments impose on everyday necessities.

Read AFPI’s new research report on grocery sales tax here.