Bill seeks to extend North Carolina food sales tax exemption to more items

State Rep. Eric Ager has proposed new legislation in the North Carolina House that would expand the food sales tax exemption to cover more types of prepared foods, according to the North Carolina State House.

The legislation, filed as HB 1065 on April 27 during the 2025 regular session, carries the short title: ‘Prepared Foods Sales Tax Modification.’

Below, we’ve summarized the key points of the bill text and provided clarifications based on its language.

This bill would increase the number of prepared foods exempt from state sales tax by updating the definition of “prepared food.” Under the proposal, items such as retailer-handled foods that are only sliced, repackaged, or pasteurized, as well as shelf-stable products with required nutrition labeling from manufacturers, would not count as prepared foods. This expansion means these items, along with eligible bakery goods, would be exempt from state sales tax. The change is scheduled to be effective as of Oct. 1, 2026, and would apply to sales from that date forward.

Of the three sponsors who signed on to this bill, Vernetta Alston sponsored the most bills (29) during the 2025 regular session.

Legislation in North Carolina goes through a multi-stage process before it can become law. After a bill is filed, it is assigned to a committee for review. The measure must pass three readings in both chambers. If either chamber amends the bill after passage, the final agreed-upon text must be approved by both chambers. Afterward, the governor has 10 days (or 30 days if the legislature is out of session) to approve the bill, veto it, or allow it to become law without signing.

Further details on legislation and other measures are available here.

Ager earned a bachelor’s degree from the United States Naval Academy in 1996.

Ager, a Democrat, was elected to the North Carolina State House in 2023 to serve the 114th House district, succeeding Caleb Rudow as state representative.