Sales tax; exempt retail sales of groceries, and adjust distribution to avoid impact on municipalities.

2025 Regular Session Introduced by Gary Brumfield and 8 co-sponsors

SB 3001 would remove groceries from the state sales tax base while adjusting revenue distributions to protect municipalities from the resulting loss in tax collections.

Died In Committee

#finance

Overview

SB 3001 proposes to exempt retail grocery purchases from the statewide sales tax and to modify how sales tax distributions are allocated to municipalities to avoid negative impacts from the exemption. The sponsor is Senator Kolkhorst (primary). A companion measure exists in the House as HB 26. The bill falls under the Finance subject area.

Purpose and intent

Create a statewide exemption for the sale of groceries from sales tax, reducing the tax burden on consumers for everyday food purchases.

Rebalance or adjust the distribution of sales tax revenues to ensure municipalities are not adversely affected by the grocery exemption, maintaining local revenue stability.

Key provisions (as disclosed)

Exemption: Retail sales of groceries would be removed from the taxable base for state sales tax.

Revenue distribution: The bill would alter the current distribution formula or mechanisms to protect municipal revenue streams from the loss of tax collections due to the grocery exemption.

Implementation scope: Details of the exempted items (typical groceries) and the exact distribution adjustment methodology are not provided in the available material, but the intent is to offset the impact on municipalities.

What would be affected

Consumers: They would pay less state sales tax on grocery purchases.

Grocery retailers: Subject to the exemption and any associated administrative changes to implement and report the exemption.

Municipalities: Potential revenue impact from sales tax collections would be mitigated by adjusted distribution mechanisms.

State treasury: Foregone tax revenue from grocery exemptions, balanced by distribution adjustments (specific fiscal effects not quantified in the provided document).

Procedural and timeline aspects

Introduced: March 14, 2025.

Initial referral: February 13, 2025 (to Finance). Subsequent committee referrals occurred, including a split path to Health & Human Services on April 7, 2025.

Hearings: Scheduled and conducted public hearing activities around April 30, 2025 (public hearing, testimony taken, and related committee actions noted).

Status: Died In Committee. The bill did not advance out of committee in the 2025 session, though actions in April indicate continued committee consideration before the eventual demise.

Related bill: HB 26 (companion in the House).

Fiscal and local impact considerations (summary)

State revenue: Exempting groceries would reduce state sales tax collections.

Local impact: The bill aims to protect municipal revenue by adjusting distribution, seeking to prevent municipalities from bearing a disproportionate burden from the exemption.

Administrative: Implementing the exemption would require changes to tax calculation systems, filing processes, and distribution formulas.

Summary

SB 3001 seeks to remove groceries from the state sales tax base while reforming revenue distributions to shield municipalities from the financial impact. Despite committee activity and a public hearing in the 2025 session, the bill ultimately died in committee. A companion bill (HB 26) exists, indicating parallel consideration in the House.

Bill