diff --git a/frontend/app/inventory/page.tsx b/frontend/app/inventory/page.tsx
index c38a3eed..e055c5de 100644
--- a/frontend/app/inventory/page.tsx
+++ b/frontend/app/inventory/page.tsx
@@ -6,6 +6,7 @@ import { inventoryApi } from '@/lib/api';
 import PageShell from '@/components/PageShell';
 import Scanner from '@/components/Scanner';
 import StatCard from '@/components/StatCard';
+import { useInventoryFilter } from '@/hooks/useInventoryFilter';
 import { toast } from 'react-hot-toast';
 import {
   Package,
@@ -39,9 +40,20 @@ export default function InventoryPage() {
   const [mounted, setMounted] = useState(false);
   const [inventory, setInventory] = useState<Item[]>([]);
   const [stats, setStats] = useState<any>(null);
-  const [expandedCategory, setExpandedCategory] = useState<string | null>(null);
-  const [searchQuery, setSearchQuery] = useState('');
   const [currentUser, setCurrentUser] = useState<any | null>(null);
+
+  const {
+    searchQuery,
+    setSearchQuery,
+    expandedCategory,
+    setExpandedCategory,
+    boxSearchQuery,
+    setBoxSearchQuery,
+    categories,
+    filteredCategories,
+    getFilteredItems,
+    getFilteredBoxes
+  } = useInventoryFilter(inventory);
   
   // Stock Adjustment State
   const [selectedItem, setSelectedItem] = useState<Item | null>(null);
@@ -66,7 +78,6 @@ export default function InventoryPage() {
   // Box Manager State
   const [showBoxManager, setShowBoxManager] = useState(false);
   const [selectedBoxLabel, setSelectedBoxLabel] = useState<string | null>(null);
-  const [boxSearchQuery, setBoxSearchQuery] = useState('');
 
   useEffect(() => {
     setMounted(true);
@@ -225,13 +236,6 @@ export default function InventoryPage() {
     }
   }, [inventory]);
 
-  // Group items by category
-  const categories = Array.from(new Set(inventory.map(i => i.category)));
-  const filteredCategories = categories.filter(c => 
-    c.toLowerCase().includes(searchQuery.toLowerCase()) ||
-    inventory.some(i => i.category === c && i.name.toLowerCase().includes(searchQuery.toLowerCase()))
-  );
-
   // Extract unique item types and box labels for suggestions
   const existingTypes = Array.from(new Set(inventory.map(i => i.type).filter(Boolean))).sort() as string[];
   const existingBoxes = Array.from(new Set(inventory.map(i => i.box_label).filter(Boolean))).sort() as string[];
@@ -340,10 +344,7 @@ export default function InventoryPage() {
               {expandedCategory === cat && (
                 <div className="p-4 pt-0 space-y-2 animate-in slide-in-from-top-4 duration-300">
                   <div className="h-px bg-slate-800/50 mb-4 mx-2" />
-                  {inventory
-                    .filter(i => i.category === cat)
-                    .filter(i => i.name.toLowerCase().includes(searchQuery.toLowerCase()))
-                    .map(item => (
+                  {getFilteredItems(cat).map(item => (
                       <div 
                         key={item.id}
                         onClick={() => setSelectedItem(item)}
@@ -717,7 +718,7 @@ export default function InventoryPage() {
             </div>
 
             <div className="flex-1 overflow-y-auto p-6 space-y-4 pt-4">
-               {existingBoxes.filter(b => b.toLowerCase().includes(boxSearchQuery.toLowerCase())).length === 0 ? (
+               {getFilteredBoxes(existingBoxes).length === 0 ? (
                  <div className="py-20 text-center space-y-4 opacity-40">
                     <Package size={48} className="mx-auto" />
                     <p className="font-bold">{existingBoxes.length === 0 ? 'No box labels defined yet.' : 'No matching boxes found.'}</p>
@@ -725,9 +726,7 @@ export default function InventoryPage() {
                  </div>
                ) : (
                  <div className="grid grid-cols-1 md:grid-cols-2 gap-3 pb-4">
-                    {existingBoxes
-                      .filter(box => box.toLowerCase().includes(boxSearchQuery.toLowerCase()))
-                      .map(box => {
+                    {getFilteredBoxes(existingBoxes).map(box => {
                         const itemCount = inventory.filter(i => i.box_label === box).length;
                         return (
                           <div key={box} className="bg-background/50 border border-slate-800/60 p-5 rounded-3xl flex flex-col gap-4 group hover:border-primary/40 transition-all">
diff --git a/frontend/hooks/useInventoryFilter.ts b/frontend/hooks/useInventoryFilter.ts
new file mode 100644
index 00000000..b5e5f9d8
--- /dev/null
+++ b/frontend/hooks/useInventoryFilter.ts
@@ -0,0 +1,46 @@
+import { useState, useMemo } from 'react';
+import { Item } from '@/lib/db';
+
+export function useInventoryFilter(inventory: Item[]) {
+  const [searchQuery, setSearchQuery] = useState('');
+  const [expandedCategory, setExpandedCategory] = useState<string | null>(null);
+  const [boxSearchQuery, setBoxSearchQuery] = useState('');
+
+  // Get unique categories from inventory
+  const categories = useMemo(
+    () => Array.from(new Set(inventory.map(i => i.category))),
+    [inventory]
+  );
+
+  // Filter categories based on search query
+  const filteredCategories = useMemo(
+    () => categories.filter(c =>
+      c.toLowerCase().includes(searchQuery.toLowerCase()) ||
+      inventory.some(i => i.category === c && i.name.toLowerCase().includes(searchQuery.toLowerCase()))
+    ),
+    [categories, inventory, searchQuery]
+  );
+
+  // Get filtered items within a specific category
+  const getFilteredItems = (category: string) =>
+    inventory
+      .filter(i => i.category === category)
+      .filter(i => i.name.toLowerCase().includes(searchQuery.toLowerCase()));
+
+  // Get filtered boxes based on search
+  const getFilteredBoxes = (boxes: string[]) =>
+    boxes.filter(b => b.toLowerCase().includes(boxSearchQuery.toLowerCase()));
+
+  return {
+    searchQuery,
+    setSearchQuery,
+    expandedCategory,
+    setExpandedCategory,
+    boxSearchQuery,
+    setBoxSearchQuery,
+    categories,
+    filteredCategories,
+    getFilteredItems,
+    getFilteredBoxes
+  };
+}