Article
Prepare direct-to-consumer sales for final food sales tax reduction in Kansas
Feb. 13, 2025 · Authored by Bob Johnson, Eric Krienert
As a result of HB 2106, passed during the 2022 legislative session, the state of Kansas has officially eliminated the state sales tax on food and food ingredients effective Jan. 1, 2025. This change represents the final phase of a gradual reduction, which began with a decrease to 4.0% in 2023 and further dropped to 2.0% in 2024.
Companies with direct-to-consumer sales should prepare for the complexity of managing varying local sales tax rates, as they must ensure compliance with both state and local regulations.
Background on Kansas food sales tax
The elimination of the state sales tax aligns with Kansas' goal of reducing the financial burden on its residents for essential grocery purchases. The legislation doesn’t apply to restaurant sales or prepared foods. The initiative specifically targets sales of groceries and food ingredients intended for home consumption, such as fruits, vegetables, meat, and dairy products. Prepared foods, including meals served in restaurants, remain subject to the full state and local sales tax rates.
Retailers are advised to adjust their point-of-sale systems to reflect the 0.0% state rate that started Jan. 1, 2025. It’s important to note that local sales taxes imposed by cities and counties on food and food ingredients remain unaffected by the legislation, meaning food and food ingredients sales will still be subject to local taxes.
Food sales tax refers to the tax imposed on the purchase of groceries and unprepared food items intended for home consumption. While some states exempt groceries from sales tax entirely, others apply a reduced tax rate or the standard state sales tax. The definition of taxable food items varies by jurisdiction and may exclude specific items like dietary supplements, prepared meals, or beverages.
Companies should analyze their product catalog against state-specific taxability rules to confirm that items are correctly classified as taxable, exempt, or partially taxable. This review should include unprepared foods, packaging, and bundled goods, ensuring the sales tax decision matrix reflects current state laws and recent legislative changes.
What are food sales taxes?
Food sales taxes are applied to the purchase of groceries and other unprepared food items intended for personal consumption. These taxes are often defined in legislation as food products, food ingredients, food for human consumption, unprepared food, or food intended for home consumption.
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The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.