Norman — OKLAHOMA CITY – The state Senate Thursday approved a bill to end the sales tax on groceries throughout Oklahoma once the state recovers from the recession.
The measure, which passed on a bipartisan 33-11 vote, contains provisions to protect cities and counties dependent on those revenues. Those entities would be reimbursed by the state for the tax they no longer would be able to collect on the sale of groceries.
“First of all, Senate Bill 1328 would not take effect until revenue collections meet 2008 pre-recession levels,” said Sen. Jay Paul Gumm, D-Durant, author of the bill. “That would put revenues at a level that would enable state government to meet critical needs without the revenue from the grocery sales tax.”
SB 1328 now moves to the House of Representatives where Rep. Randy Terrill, R-Moore, is its sponsor.
Despite the bill’s passage, Senate President Pro Tem Glenn Coffee indicated it could be difficult for the measure to be signed into law this year. Lobbyists for cities and counties are fiercely opposing the bill.
Gumm said for him, the effort to end the tax on groceries is about a question of right and wrong.
“This speaks to our values. Is food something we really should be taxing?” he asked. “Most states do not because they know the sales tax on groceries is the most regressive, most hurtful tax there is — not only for the poor, but for middle-income families.”
Gumm said the grocery sales tax creates a higher effective tax rate the lower a family’s income.
“The less money a family has, the greater percentage of it the must spend on groceries and the tax on them,” he said. “That means middle- and lower-income families spend more of their money on the grocery sales tax than do the wealthy, and that is simply unfair.”
Gumm acknowledged the bill faces an uphill battle.
“The lobby group for cities and counties will pull out all the stops to fight this, just as they did with the back-to-school sales tax holiday,” he said. “There also are legitimate concerns about the impact to state revenue. That is why we put the trigger into the bill and made certain cities and counties are reimbursed for their lost taxes.”
For the state’s long-term economic interests, however, the lawmaker said ending the sales tax on groceries is the right direction to move.
“If we are successful and the sales tax on groceries ends, that money isn’t going to disappear from Oklahoma’s economy,” he said. “That money will go right back into local stores and businesses, fueling economic growth in every community and county of this state.
“This is the right thing to do, for individuals, for families and for our state.”
The Associated Press contributed to this story.
