OKLAHOMA CITY — A proposal to reduce the state’s portion of a grocery sales tax is dead for the 2023 regular legislative session.
Championed by Gov. Kevin Stitt, bills eliminating the state’s portion of a grocery sales tax and to reduce the state income tax have shown no progress in the final days of the legislative session.
House Bill 1955, authored by House Speaker Charles McCall (R-Atoka) remains dormant in the Oklahoma Senate’s Rules Committee. The measure cleared the House March 31, on an 88-7 vote.
McCall’s bill would eliminate the state’s portion of a grocery sales tax – about 4.5% – of the tax. That cut, a fiscal estimate showed, would total more than $370 million. The bill would not affect the municipal portion of the sales tax.
Most cities and towns in Oklahoma get a majority of their funding from sales tax revenue.
The tax reduction has been a part of the governor’s legislative platform for several years. In January, Stitt mentioned the cut in his State of the State speech and made the grocery sales tax cut part of his budget.
Last Thursday’s the governor’s office issued a statement renewing his call for the cut.
“Governor Stitt has been very clear — there has never been a better time to deliver tax cuts to Oklahomans,” wrote Stitt’s spokesman, Kate Vesper. “While Oklahomans struggle with record-high inflation caused by the Biden administration, our state is sitting on a historic savings account; we need to return that money to the taxpayers.”
Still, while the governor and the leadership of the House of Representatives supported the idea, the Senate’s Appropriations Chairman told the Tulsa Regional Chamber of Commerce earlier this year that cutting the sales tax on groceries was a bad idea.
Sen. Roger Thompson (R-Okemah) said a grocery tax cut wouldn’t help families that much. He said the cut would only reduce a $500 grocery bill by $22.50.
“I’ve been opposed to cutting the grocery tax all the way through,” Thompson said. “The average spent at the grocery store in Oklahoma is about $500 a month. The people who need help the most may be on or other benefits and not paying sales tax to begin with.”
Thompson’s lack of enthusiasm for the tax cut was echoed by the executive director of the Oklahoma Municipal League.
“Retail tax revenue is the main funding source for the state’s cities and towns,” said Mike Fina, the OML’s chief. “Cutting that tax would have a direct impact on them.”
Records from the Oklahoma Tax Commission show the state collected more than $2.3 billion in sales from during the 2021-2022 fiscal year.
Members of the legislature’s minority caucus have supported a cut in the grocery sales tax. This year, House Democrats offered a proposal that would phase the tax out over several years. That measure, like McCall’s, remains dormant.