Senator Gumm Targets State Sales Tax on Groceries

Calling it a “moral imperative” for Oklahoma’s working families, a southern Oklahoma senator again will introduce legislation to remove the state sales tax on groceries.

This will be the third year Senator Jay Paul Gumm will try to end collection of the state’s portion of the sales tax on groceries. The state sales tax on groceries is 4.5 cents on every dollar spent at the check-out stand.

Gumm, D-Durant, introduced Senate Bill 34 last year; that measure was never granted a hearing in the Senate Finance Committee. The lawmaker said he will continue to press for passage of such a measure, vowing “to work with any of my colleagues, Democrat or Republican, who will help pass this important bill.”

The exemption would not extend to alcoholic beverages or tobacco. Gumm’s proposal would allow municipalities and counties to continue collecting the grocery sales tax unless each jurisdiction individually makes the decision to honor the exemption.

“Oklahomans I represent, and people across the state, tell me time and again: ‘When the budget gets better, please end the sales tax on groceries,’’ he said. “Now is the time and this bill is a response to that plea from people in every region of Oklahoma.”

The lawmaker has long advocated removing the state sales tax on groceries. The proposal has run into resistance because some prefer to focus on cutting the income tax or on not cutting taxes at all. That alliance from both ends of the political spectrum repeatedly spelled doom for the proposal.

Two years ago, according to legislative records, a bill to cut the grocery sales tax was denied a hearing in the House of Representatives’ Revenue and Taxation Committee, effectively killing it. Last year, Gumm’s proposal was denied a hearing in the Senate Finance Committee.

“Clearly, this policy deserves a chance to be considered by the House and Senate’s tax policy committees rather than being killed in the proverbial ‘smoke-filled room,’” he said. “Now is time for both parties to focus on cutting the most regressive of taxes – the grocery sales tax.”

The lawmaker explained the grocery sales tax is a heavier burden than any other tax on families who can least afford it. The Alliance for Oklahoma’s Future reported last year the bottom three-fifths of taxpayers – most Oklahomans – pay an effective tax rate of 11 percent for state and local taxes. The wealthiest Oklahomans, however, pay an effective state and local tax rate of less than 9 percent.

Middle- and lower-income families also spend a greater percentage of their income on necessities like groceries than do the wealthy. That creates for most Oklahoma families what Gumm calls a “double-whammy.”

“Removing the sales tax on groceries will certainly make the tax system fairer for Oklahoma’s working families,” he said. “This is the tax cut that should be at the top of the agenda if my colleagues are going to look at cutting taxes. We can, and we should, remove this undue burden on those least able to afford it.”

The lawmaker said most of the money consumers would save through ending the state’s grocery sales tax would be pumped right back into the economy. The first sales tax cut in decades – Oklahoma’s first “Back-to-School” sales tax holiday passed this year and championed by Gumm for years – had that affect.

According to figures released by the Office of State Finance, August sales tax revenue jumped by $4.6 million over what was collected in 2006 and was $4.8 million more than budget planners estimated. The only policy change that could have been responsible for the boost was the sales tax holiday.

“Removal of the grocery sales tax will help those Oklahomans who need it the most: working families,” Gumm concluded. “It will be a boost for Oklahoma’s grocers and retailers, and I still believe removing sales tax on groceries is a moral imperative for the people of Oklahoma.”