As Kansans head into the new year, they may notice a slight decrease in their household bills starting Wednesday, Jan. 1.

That’s because the final phase of the state’s food tax elimination goes into effect on New Year’s Day. Kansans will no longer pay sales tax to the state on many grocery items.

Economist Donna Ginther, a distinguished professor of economics and director of the Institute for Policy and Social Research at the University of Kansas, said that sales taxes disproportionately impact low-income families.

“The problem with sales taxes in general is that they are regressive,” she said. “Low-income households pay a larger share of their income in sales tax because they are spending what they earn.”

Ginther, served as the academic adviser to Gov. Laura Kelly’s tax reform council from 2019 until 2022. She said elimination of the state’s sales tax on food was one of the group’s major goals.

The measure passed with broad bipartisan support in 2022, right as inflation linked to the COVID-19 pandemic caused grocery prices to rise. Here’s a closer look at what the elimination of the food tax will mean for Kansas households.

How will Kansans be impacted by the food tax elimination?

The elimination of Kansas’ sales tax on food is the third and final step in a multi-year process. On Jan. 1, 2023, the tax was lowered from 6.5% to 4%. The following year, it dropped from 4% to 2%. Now, that 2% finally decreases to 0%.

“We showed that when the food sales tax was fully eliminated, the average household of four saved about $500 a year,” Ginther said. Those savings have been coming into effect gradually since the sales tax elimination was passed in 2022.

The immediate impact Kansans will see is a slightly lower total in the grocery checkout line for most food items, including bottled water, dietary supplements, candy, soda and snacks.

Alcohol, tobacco and most prepared foods, such as ready-to-eat items served hot or with utensils, will still be taxed at the state’s non-food rate of 6.5%.

Statewide, the eliminated sales tax on food was predicted to reduce the state’s general fund revenues by $437.1 million in 2025. That’s around 4.2% of the total projected general fund revenue of around $10.4 billion. It’s too early to say whether this prediction is accurate, or how the reduced sales tax revenue could impact state programs or services in Kansas.

Does this mean there will be no sales tax on groceries in Kansas?

The sales tax that is being eliminated Jan. 1 is the state sales tax on food. However, local sales taxes will still apply to food, which means the tax you pay will vary depending on where you live.

“Kansas is slightly higher than Missouri in terms of sales taxes,” Ginther said. “We actually rank No. 9 in terms of sales tax burden (in 2024).” In 2024, Missouri had a 1.225% state sales tax on food.

Johnson County charges a 1.475% sales tax on food, while Wyandotte County has a food sales tax of 1%.

On top of that, many cities charge their own sales tax on food. For example, Overland Park charges 1.375%, Olathe charges 1.5% and Kansas City, Kansas, charges 1.625%.

Special development districts can also add additional taxes on top of county and city taxes. These districts in places including Olathe and Leavenworth have some of the highest food sales taxes in the state, reaching up to a combined 5% even after the statewide sales tax is eliminated. In other counties where no local sales taxes are charged on food, the total will drop to 0% on Jan. 1.

“Kansas’ approach to taxes has been to try to distribute the tax burden between sales, property and income taxes,” Ginther said. “Overall, our sales taxes are still pretty high.”

Do you have more questions about the cost of living in Kansas or Missouri? Ask the Service Journalism team at kcq@kcstar.com .

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