Posted on Sun, Oct. 01, 2006

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Lower taxes on food kick in

Change applies to unprepared items, but not hot meals

By Zane Wilson

The Sun News

Starting today, your groceries will take a smaller bite out of your wallet. State taxes on unprepared food drop from 5 percent to 3 percent.

The tax cut was a legislative tradeoff for raising the sales tax 1 percent starting June 1 to pay for school operating expenses.

The grocery tax cut applies to unprepared food only. That means items such as canned and frozen goods meant to be taken home and prepared, according to the state Department of Revenue.

It does not apply to prepared food such as hot meals sold in grocery stores.

The change will save consumers $1 on a $50 grocery order.

Grocery stores and other chains that sell unprepared food, such as drugstores, don't expect any problem making the change. Stores contacted said the changes are made electronically in corporate headquarters.

"We don't anticipate any problems with that," said Ann Cheshire, Bi-Lo spokeswoman at the company headquarters in Greenville. "The registers are reloaded automatically at 1 a.m. on Oct. 1."

She said most stores work in the same way. When items are purchased wholesale, their bar codes are scanned in the central computers as either food or nonfood.

The stores use the federal regulations on what can be purchased with food stamps to define a food item, Cheshire said.

The state Department of Revenue also said the new sales tax law applies to the same foods defined in the federal law.

When the sales tax goes up to 6 percent in June, the tax will remain at 3 percent on groceries.

A few residents will be able to get their groceries even cheaper.

State law gives a 1 percent sales tax cut to everyone older than 85. To get the tax cut, you must tell the cashier and show proof of age.

Last year, grocery stores in South Carolina recorded $5 billion in taxable sales. Separate figures are not available for counties.

Horry County recorded $5.5 billion in total taxable sales, while Georgetown County recorded $647.4 million, according to the Revenue Department.