House Votes to Cut Grocery Tax

Today, the state House voted to cut Tennessee’s tax on groceries. Cuts to the tax are rare, but the measure passed unanimously.

Bill sponsor David Alexander, a Winchester Republican, totaled up average savings from a cut in the tax on groceries, and the resulting reduction in state revenue.

“In a year’s time, a family of four would save somewhere between thirty and forty dollars And it costs about $22 million for the state of Tennessee to allow that to happen.”

House Democratic Leader Craig Fitzhugh sponsored the last cut in grocery sales tax, a half-percent in 2008. He says the reducing the tax is an idea that has bipartisan support, even if it has an effect on the state’s revenue. 

“You can look over the years, that members of both parties have filed this, because we understand our reliance on the sales tax, and we understand that one of the most stable parts of our sales tax is the sales tax on food, and we don’t want to lose it because it is so stable. But it is wrong.”

Governor Bill Haslam proposed the cut in January. It takes the tax on food to 5.25 percent, down from 5.5 percent.

The Senate version of the bill comes up in the Senate Finance Committee next week.

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The bill started out reducing the tax by a lesser amount – it was amended to make the cut a quarter of a percent.

It reduces the tax on food and food ingredients purchased to be cooked at home. It doesn’t cover prepared food purchased in restaurants.

For all the attention the bill has received, it’s only one paragraph long.