While we agree with Gov. Kevin Stitt that it is time for the state to truly address the state sales tax on groceries, it appears he’s making a somewhat discombobulated argument for taking up the matter right this minute.
The governor is correct that Oklahomans have been hit hard by inflation, and that one form of relief would be cutting the 4.5% state sales tax on groceries. The Legislature has had this issue before it all year, and elected not to address it. They also have chosen not to address it in the special session.
Oklahoma is currently one of 13 states that still taxes groceries on the state level. It is an issue and a reasonable “tax cut” that should be discussed and voted on in the upcoming session. We also can see why some legislators believe they need to study the long-term impact of eliminating this tax. However, in the long run, eliminating the tax is the right thing to do, and we hope they come to that conclusion.
However, the governor has tried to posture the grocery sales tax cut as an either/or proposition in relation to nearly $2 billion in projects for Oklahoma that is being funded through the American Rescue Plan Act (ARPA) funds, which really has nothing to do with tax cuts on the state level.
He said lawmakers shouldn’t spend $2 billion in “special interest” projects without passing the elimination of the sales taxes on groceries.
These two things aren’t related. The ARPA funds have been appropriated to the state by the federal government. They are one-time money to be spent on getting some big projects accomplished, such as broadband infrastructure, water projects, economic development projects and other projects that communities and organizations across the state applied for last year.
Cutting the state sales tax on groceries has bipartisan support. Eliminating the tax would cost the state about $300 million in revenue. As a recent state treasurer’s report appears to show the state is in good economic position over the next several years to see tax dollars grow, we hope the Legislature gets serious about eliminating this tax during the next session.