If you’ve ever used so many coupons that you actually got your grocery total down to zero, it can take some of the fun out of it when you end up having to fork over some cash anyway to pay sales tax.
They don’t make coupons to give you a discount on your taxes. But some states are looking to do the next best thing.
Cities and counties all across the country impose sales tax on grocery purchases. But only ten states do. And several of them are looking to lower or abolish those taxes, at a time when grocery affordability is a growing concern.
Lawmakers in Alabama, Arkansas, Mississippi and Tennessee are among those calling for reducing or eliminating state sales taxes on groceries this year. Over the past year, Kansas and Oklahoma eliminated theirs, while Virginia did the same the year before. And Illinois is set to do so beginning next year.
Idaho last week did something slightly different. After an effort to remove the grocery sales tax failed, the governor signed into law an expansion of the state’s grocery tax credit, which helps to offset the 6% state sales tax on groceries.
“We have heard from Idahoans loud and clear that they need relief on the cost of groceries, and the Idaho Legislature answered the call,” Senate Pro Tem Kelly Anthon said in a statement. “Providing even more relief on the most basic of needs – food – is just the right thing to do,” House Speaker Mike Moyle added.
That’s all well and good, but grocery shoppers aren’t the only ones feeling a financial pinch lately. Some local governments aren’t so eager to give up any tax revenue that’s currently coming in.
A tax-relief proposal in Missouri “keeps me up at night,” David Dimmitt, mayor of Brentwood, told St. Louis’s KMOV-TV. That’s because the proposal would not only eliminate the state sales tax on groceries, but force cities and counties to do the same. Dimmitt predicted local municipalities would have to lay off city workers, delay needed projects and introduce new taxes to make up for the loss of the old ones.
Other local municipalities in other states are taking matters into their own hands. When Illinois eliminated its 1% state sales tax on groceries, which takes effect next year, it also allowed local communities to impose their own 1% sales tax. And so far, dozens have taken the state up on its offer. So shoppers across Illinois will be paying their 1% to the city or county instead of to the state, and won’t be saving any money on their groceries at all.
For dedicated couponers, it might be preferable to do away with sales tax on coupons themselves. Only a handful of states currently exempt manufacturer’s coupons from sales tax, which means you pay state tax only on the discounted, after-coupon price. So if you have enough coupons to get your total down to zero, your final total really is zero. All other states charge sales tax on your total before your manufacturer’s coupons are applied. So no matter how many manufacturer’s coupons you use there, you’re still going to owe tax on the items’ full selling price.
Most sales taxes are just a few percentage points, which amount to a few dollars at most for a routine grocery shopping trip. So paying the tax isn’t going to break the bank, nor will reducing or eliminating the tax make you flush with extra cash. But as any grocery shopper watching their bills rising knows – every little bit counts.
Image source: Safeway
