Gov. Lee proposes bringing back the grocery sales tax holiday, extending it to 3 months

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Staff Reports

In a move that will be welcomed by many Tennesseans, Governor Bill Lee has announced plans to cut the food tax on groceries in the state. The proposal is set to take effect in 2023, and will provide relief to residents who have been struggling to make ends meet due to the high cost of living.

The decision to reduce the food tax on groceries is a part of Governor Lee’s broader efforts to make Tennessee a more affordable place to live.Tennessee tax cuts The state currently imposes a 5% sales tax on food and food ingredients, with some local jurisdictions adding an additional 2.75% tax on top of that. This means that Tennesseans pay some of the highest food taxes in the country, with many low-income families struggling to afford basic groceries.

 

Governor Lee’s proposal would cut the food tax by 1%, bringing it down to 4%. While this may not seem like a significant reduction, it is estimated that it will save the average Tennessee household around $44 per year. For low-income families, this could make a huge difference, allowing them to stretch their budgets a little further and buy more food for their families.

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The food tax cut has received widespread support from advocates for low-income families and anti-poverty groups, who have long argued that Tennessee’s food tax disproportionately affects the most vulnerable members of society. They argue that the tax on groceries is regressive, as it hits low-income families the hardest, while the wealthy can easily afford to pay it.

RelatedStates That Still Impose Sales Taxes on Groceries Should Consider Reducing or Eliminating Them

Opponents of the food tax cut argue that it will lead to a loss of revenue for the state, which could impact funding for important public services like education, healthcare, and infrastructure. They argue that the state should instead focus on finding other ways to raise revenue, such as closing tax loopholes or increasing taxes on luxury goods.

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Despite these concerns, Governor Lee has remained committed to his proposal, arguing that the food tax cut is a necessary step towards making Tennessee a more affordable place to live. He has noted that many neighboring states, including Kentucky, Missouri, and Arkansas, have already eliminated their food taxes, putting Tennessee at a competitive disadvantage.

Related: How does Tennessee’s tax code compare?

Overall, the decision to cut the food tax on groceries is a positive development for residents of Tennessee. It will provide much-needed relief to low-income families who have been struggling to make ends meet, while also making the state a more attractive place to live for businesses and individuals alike. As we move into 2023, it will be interesting to see how the food tax cut impacts the state’s economy and quality of life for its residents.