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If you check your receipt from the grocery store, you may notice some food items are now being charged less sales tax. That statewide reduction in Kansas food sales tax of 2.5 percentage points took effect on Jan. 1. But what grocery items are actually eligible for the sales tax break is complicated and not at all obvious.
The Kansas Department of Revenue published a 26-page booklet with a flowchart and a “product matrix” to explain it. The guide is intended to help the retail food industry “avoid costly mistakes.” What classifies as food, as defined by the state, is based on who prepared it and whether it is served with utensils.
How much is the Kansas food sales tax?
The Kansas food sales tax has changed due to a change in state law adopted last year. Effective Jan. 1, Kansas will no longer charge the same sales tax on food as other items. With the new year, the Kansas food tax rate went from 6.5% to 4%. As a result, everyone is seeing the cut of 2.5 percentage points statewide.
Under the new law, the state rate will further decline to 2% on Jan. 1, 2024, and zero on Jan. 1, 2025. Gov. Laura Kelly would like it to go to zero sooner and will push the legislature to modify the new law when it reconvenes next week.
She was in Wichita on Wednesday, Jan. 4, to promote her “Axing Your Taxes” proposal, which in addition to accelerating the elimination of state sales tax on food would eliminate sales tax on diapers and feminine hygiene products. The proposal also calls for an annual four-day state sales tax holiday for back-to-school shopping each August.
Kelly said she would not repeal sales tax on food and other items entirely, which would require the state prohibiting local jurisdictions from taxing those items. “I am a big believer in local control,” Kelly said. “In no way do I think the state of Kansas ought to impose that upon our local communities.”
Download a spreadsheet with all local tax rates here. Look for “Publication 1700: All city, county and special jurisdiction tax rates.”
What is eligible for the reduced Kansas food sales tax rate?
Broadly, the state of Kansas classifies food as either food and food ingredients – typically considered grocery store items – and prepared food, typically considered restaurant items. But since many stores sell prepared food in various forms, it can get confusing.
For example, a pound of chicken from the freezer section is food. A hot rotisserie chicken from the deli is prepared food – and is charged the full sales tax rate. Get it cold instead, it’s charged the reduced rate.
Generally, prepared food is not eligible for the lower food sales tax rate, but don’t make any assumptions. The state’s product matrix includes more than a dozen “prepared food exceptions” for prepared foods that fall under the reduced food sales tax rate. The classification system can feel completely random: Olive oil and dietary supplements are considered food, but cat food is not food, nor gardening seeds.
|Food subject to reduced sales tax||Items subject to full tax|
|Nonalcoholic beer or wine||Alcoholic beer or wine|
|Meal preparation kits sent to your home||Meal preparation kits sold at the store|
|Bottled soda, candies, bagged chips at the movies||Fountain sodas, prepared nachos at the movies|
|Take-and-bake pizza without utensils||Take-and-bake pizza with utensils|
|Donuts without utensils||Donuts with utensils|
|Cold ready-to-eat chicken||Hot rotisserie chicken|
|Packaged sandwich or lunchable||Sandwich sold at deli|
|Bananas, apples, fresh produce||Cut fruit and veggie trays|
|Dietary supplements and vitamins||Pain relievers and antacids|
|Pumpkin seeds packaged to eat||Seeds for the garden|
How do stores know how much Kansas food sales tax to charge for each item?
Every store that sells both qualifying and nonqualifying food items needs to have a point-of-sale system programmed to account for the differences and assess sales tax rates accordingly. The Beacon contacted both Dillons and Walmart corporate offices for comment about this process and potential for error but received no response from either.
According to Cassie Nichols, Kelly’s press secretary, the classification is driven by the state’s participation in a multistate compact intended to standardize sales taxes, making the process easier on businesses. Kansas is one of 23 fully participating states, which include neighboring Nebraska and Oklahoma but not Missouri or Colorado.
How can I know if the sales tax is being assessed correctly?
It’s hard to be certain.
- You need to know how the state classifies what you are buying.
- You need to know what taxing district the store is located in to know what the rates should be.
- And you need to be prepared to check your receipts and do some math.
In at least one instance shared on social media, a Wichita Walmart Supercenter store at 53rd and Meridian erred on Jan. 1 by applying both tax rates to all items purchased – a total levy of 12.5% – making one Wichita man’s grocery bill about $27 higher than it should have been.
Shawn Lawrence of Wichita realized he was being charged both food and nonfood tax rates on all items because the amount of sales tax represented 12.5% of his total bill – 7.5% plus 5%. Lawrence shared a picture of his receipt from a Walmart Supercenter that showed he was assessed both taxes.