Kansas will eliminate its grocery tax — slowly: Governor agrees to Legislature’s plan

The sales tax on groceries in Kansas will dwindle away over the next three years under a measure approved by the Legislature on Thursday night.

Soon after the vote, Kansas Gov. Laura Kelly announced she would sign the legislation, which was approved unanimously in the Senate on Wednesday and on an 114 to 3 vote in the House the next day.

“Make no mistake — today’s action is a win for every single Kansan,” Kelly said. “Eliminating the state tax on food will provide financial relief to everyone, and this bill is a good first step.”

In 2025, Kansas will join 33 states in not taxing groceries, considered one of the most regressive taxes because lower income individuals put more of their earnings toward food than higher earners. The current 6.5% food tax is among the highest in the nation, especially when coupled with local sales taxes.

The bill incrementally reduces the state sales tax rate on food:

▪ As of Jan. 1, 2023, the tax will be 4%.

▪ On Jan. 1, 2024, the tax drops to 2%

▪ On Jan. 1, 2025, the tax disappears completely.

“We always have to hinge maybe a little bit on the conservative side because bad things can happen,” House Majority Leader Dan Hawkins, a Wichita Republican, said. “The way this is structured allows us to be careful.”

The tax cut would apply to most groceries but not prepared foods.

Whether Kansans will really notice the phased-in cut remains to be seen, as inflation pushes costs higher. The current rate of inflation outpaces the initial cut of 2.5 percentage points. Kelly and others who supported ending the tax have said it could save some families up to $500 a year.

Kelly, a Democrat up for reelection, had pushed hard to eliminate the tax immediately, saying Kansas could afford it amid revenue collections that have surged to historic levels.

In her statement announcing she’d sign the bill, Kelly asked lawmakers to pass another bill moving the implementation date to July 1 — getting relief to Kansans earlier and before the election.

“We owe it to Kansans to get this done and get it done immediately,” Kelly said.

An earlier date, however, is unlikely.

Republican lawmakers had insisted a gradual reduction in the tax was the more financially responsible option and gives vendors time to adjust. They attacked Kelly for vetoing two 2019 bills that would have reduced the food tax — but also contained, as the governor has noted, other costly tax breaks for corporations.

Rep. Adam Smith, a Weskan Republican, noted that while the corporate tax cuts included in that bill have since become law, a food sales tax cut hasn’t.

“We could have had this three years ago,” Smith said.

But Democrats have said lawmakers are now delaying implementation until Jan. 1 to ensure the tax wasn’t eliminated before the November election.

“I think the question of the night is how low can we go, and the answer is we are not going as low as we should,” Rep. Annie Kuether, a Topeka Democrat, said.

She, as well as Topeka Democrat Rep. Jim Gartner and Wichita Republican Rep. Brian Bergkamp were the three lawmakers who voted no on the bill.

The vast majority of House and Senate Democrats ultimately voted to support it.

“At least this is a march to zero I can support,” Rep. Stephanie Clayton, an Overland Park Democrat, said.

Attorney General Derek Schmidt, Kelly’s likely Republican opponent, had called on the Legislature to reduce or eliminate the tax on groceries. As the party’s anticipated standard-bearer, his call to action placed additional pressure on Republicans to act.

After his statements, legislative leaders in the House and Senate put out statements indicating the state should spend part of its budget surplus on eliminating the tax.

In a statement John Wilson, executive director for Kansas Action for Children, thanked the Legislature for finishing the issue but expressed frustration it took until the last minute.

“This change will help many Kansans in the future, especially as we continue to see inflated prices on groceries and stagnated earnings among those living on low wages,” Wilson said.

With the tax cut approved, Democrats and Republicans will almost certainly spend the rest of the campaign jousting over who deserves credit. Democrats can tout the governor’s push for the tax’s total elimination, while Republicans can point to the attorney general’s advocacy.

Shortly after Kelly’s announcement Thursday night Schmidt thanked the Legislature for answering “our bipartisan call to reduce or eliminate the state sales tax on groceries.” Then, he took a jab at Kelly.

“The state grocery tax should have been put on the path to elimination in 2019 but Governor Kelly’s veto stood in the way,” he said in a Twitter post.

The Star’s Jonathan Shorman contributed to this report.