Eliminating Sales Tax On Oklahoma Groceries

Thursday, January 22nd 2009, 7:54 am
By: News On 6

By Rusty Surette, NEWS 9

OKLAHOMA CITY, OK -- State lawmakers are debating a new tax cut bill that would eliminate all taxes on groceries.

Many mothers like Melissa Garcia said they think it's a great idea.

"Oh, I think this is an awesome thing," Garcia said.

Families across the state are living on tight budgets as the economy continues to struggle.

April Stansberry used to live in Florida, a state that has no sales tax on food.

"That was really nice," Stansberry said. "If you needed to go get groceries, you didn't have to pay sales tax on that, so you knew exactly what you were spending."

State Senator Jay Gumm (D-Durant) is the man behind the new bill, Senate Bill 42. Gumm is hoping to eliminate all taxes on all groceries, but his plan could create a problem for the state.

"This really may not be the year to do it, because of the difficult budget times we're in," Gumm said.

His plan could cost Oklahoma $350 million in lost sales tax revenue. Gumm said the state would reimburse cities like Edmond that depend on local sales tax revenue, which could total nearly $700 million.

Representative Richard Morrissette (D-Oklahoma City), who started working on the bill two years ago, said his plan would only eliminate the state's side of sales tax on certain foods.

"House Bill 1926 this year will eliminate that portion of that state grocery sales tax on healthy foods only," Morrissette said. "For example, if you buy potato chips, you pay the sales tax, but if you buy milk or baby formula, you don't."

Under Morrissette's plan, the state would only lose $50 million in revenue, which he said is an easier shortfall to work with compared to Gumm's plan.