Reduction in state sales and use tax rate on food.
Based upon the 2022 Kansas House Bill 2106, the state sales and use tax rate has been reduced on food and food ingredients and certain prepared food. Effective January 1, 2023, the state sales and use tax rate was reduced from 6.5% to 4%. On January 1, 2024 the state sales and use tax rate was reduced to 2%, and on January 1, 2025, the state sales and use tax rate was reduced to 0%. This means there will be no state sales or use tax on these food items but county and city sales taxes will still apply. It is important to note, the sales tax on food and food ingredients, and certain prepared food, was not repealed by Kansas. The tax rates were just reduced to zero over time.
For Kansas state sales and use tax purposes, these “food” items are separated into two categories:
- Food and food ingredients, and
- Prepared foods
Food and food ingredients can typically be thought of as “grocery store food items.” K.S.A. 79-3602(n) defines “food and food ingredients” as:
Substances, whether in liquid, concentrated, solid, frozen, dried or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value. “Food and food ingredients” includes bottled water, candy, dietary supplements, food sold through vending machines and soft drinks. “Food and food ingredients” does not include alcoholic beverages or tobacco.
Prepared food can typically be thought of as a “restaurant meal.” K.S.A.79-3602(ooo)(1) defines “prepared food” as:
- Food sold in a heated state or heated by the seller;
- two or more food ingredients mixed or combined by the seller for sale as a single item; or
- food sold with eating utensils provided by the seller, including, but not limited to, plates, knives, forks, spoons, glasses, cups, napkins or straws. A plate does not include a container or packaging used to transport the food.
Refer to Publication KS-1223 for examples of what is “prepared food” and what is not “prepared food.”