HB 21 does not raise taxes on businesses or threaten jobs
NASHVILLE, Tenn. – State Rep. Elaine Davis, R-Knoxville, today filed legislation to eliminate Tennessee’s grocery tax.
House Bill 21 ends the state tax on retail sales of food and food ingredients without local revenue loss or raising a single penny of taxes on Tennessee businesses.
“We have all felt the impact of rising food prices over the last few years, and working families have struggled to put food on the table as a result,” Davis said. “Tennesseans know best how to spend their own money. Repealing taxes on essential items like food and personal hygiene products has been one of my top legislative priorities. This legislation will save families hundreds of dollars annually and not have any consequences for our business owners or their employees. I’m honored to carry this legislation with support from House leadership.”
The Volunteer State remains one of the lowest-taxed states in the nation and collects zero state income tax. During the 113th General Assembly, Davis and her Republican colleagues passed the largest two tax cuts in state history, including a three-month-long tax holiday on groceries, through the Tennessee Works Tax Act of 2023 and Franchise and Excise Tax Reform. In addition to benefitting families, these cuts provided important relief for small businesses through various changes to business, franchise, and excise tax collections.
Since 2012, Tennessee Republicans have cut $5.1 billion in state taxes by approving several sales tax holidays and eliminating taxes on citizens and businesses of all sizes. Other cuts include eliminating the Hall income tax, inheritance tax and nearly all professional privilege taxes on citizens in certain occupations.
“Repealing the state grocery tax without burdening our businesses is a critical step in our ongoing efforts to reduce the financial burden on working families and ensure that basic necessities are more affordable for all Tennesseans,” said House Majority Leader William Lamberth, R-Portland, who serves as co-sponsor of House Bill 21. “This tax cut is not just about saving money—it’s about helping families thrive by making Tennessee a more affordable place to live. I’m proud to continue our supermajority’s tradition of good fiscal stewardship that Tennesseans have come to expect and rightly deserve.”
The state sales tax on food and food ingredients is currently 4%, plus the local sales tax rate. This includes food items like eggs, bread, canned goods, produce, cereal, spices and condiments. It does not include food prepared by the seller, ready-to-eat meals, candy, alcoholic beverages, tobacco or dietary supplements.
Davis’ proposal allows individual counties to implement a sales tax on groceries if approved by their local legislative body. If passed by the General Assembly, the proposal would take effect July 1, 2025.
The 114th General Assembly is scheduled to convene on Jan. 14, 2025.
This is a companion discussion topic for the original entry at https://tnhousegop.org/state-rep-elaine-davis-proposes-true-grocery-tax-relief/