Oklahoma Removes State Level Tax On Food Effective August 2024

The governor of Oklahoma has signed a bill that will reduce the state sales tax rate on food and food ingredients to zero percent. As the bill doesn’t specify an effective date, it is expected to come into effect 90 days after the end of the Oklahoma Legislative Session in August. The bill also restricts any increases in local sales taxes from affecting food and food ingredients until June 30, 2025.

The zero rate does not apply to alcoholic beverages, dietary supplements, marijuana products, prepared food, or tobacco. The state definition of food and food ingredients qualified for the exemption does include bottled water, candy, and soft drinks. Prepared food is defined as “food sold in a heated state or that is heated by the seller, two or more food ingredients mixed or combined by the seller for sale as a single item, or food sold with eating utensils provided by the seller, including plates, knives, forks, spoons, glasses, cups, napkins, or straws.” As a Streamlined Sales Tax member state, the bill also included adoptions of the Streamlined Sales Tax product definitions for these items. “Food and food ingredients” means substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value. (2023 OK H 1955, Enacted, (Feb. 29, 2024))

Posted on March 15, 2024