Food Taxes and Their Impacts on Food Spending

Sales taxes on foods sold at grocery stores and/or restaurants exist in almost every county in the United States. By combining county-level sales tax data with U.S. Department of Agriculture’s (USDA) 2012–13 National Household Food Acquisition and Purchase Survey (FoodAPS), we examine the association between both types of taxes and a household’s spending on grocery and restaurant foods for three groups: USDA Supplemental Nutrition Assistance Program (SNAP) participants, households that are eligible for SNAP but do not participate in the program, and households that are not eligible for SNAP. We found that, among households that are eligible for SNAP but do not participate in the program, grocery taxes are associated with reduced spending on foods purchased for at-home consumption. No such association is found among the two other groups of households considered in this study, suggesting they are less sensitive to grocery taxes. SNAP households spend more money on foods purchased for at-home consumption in communities with higher restaurant taxes.